American Eagle Outfitters Inc. had a tough first quarter against strong year-ago results, but managed to see improved gross margins due to product cost benefits that include supply-chain efficiencies.
For the three months ended May 4, the specialty chain posted a 29.5 percent decline in net income to $28 million, or 14 cents a diluted share, from $39.7 million, or 20 cents, a year ago. On an adjusted basis excluding asset write-offs and special items, earnings were 18 cents a share, which beat Wall Street’s consensus expectations by 1 cent. Net revenues fell 4.1 percent to $679.5 million from $708.7 million, while consolidated comparable-store sales fell 5 percent against a 17 percent gain a year ago.
Robert Hanson, chief executive officer, said, “We are pleased to be able to deliver the level of profitability we did even faced with a tough economic environment.”
The company saw cooler weather causing soft demand for seasonal merchandise, compared with warmer-than-normal weather and strong performance in the year-ago quarter.
The chain also flowed warmer-weather merchandise such as crop tops and shorts in its women’s business, too early in the season.
American Eagle in the quarter had capital expenditures totaling $46 million, with half that related to store investments and the balance connected to information technology and e-commerce investments. Total capital expenditures for the year are expected at between $250 million and $280 million.
Hanson said, “Our intent is to be the best at omnichannel commerce. We are putting the customer at the center of our thinking and removing any barriers to them shopping on their terms.”
The ceo also said the new summer line arrived last week and is adding freshness to the assortment now that the weather has turned warmer. The merchandising team fast-tracked 40 choices in women’s for the second quarter based on early spring results.
As for fast tracking, Hanson explained that the company keeps about 20 percent of customer choices open at the beginning of each season. The retailer tests, sorts and tracks early selling from customer reactions to the product line. Working with certain suppliers on platform fabrics, raw materials and securing available production lines enables American Eagle to flow additional goods that will sell into the stores within 45 to 90 days, typically in the same selling season.
The company has also refined its product development calendar, increasing the cycles to six from four times annually. It also has removed between four to six weeks from the overall development timeline per cycle.
Back-to-school floor sets will begin to flow in the beginning of July, although the earlier sets will be focused more on transitional merchandise. Most of the b-t-s selling is done in August and September, with August the time when there will be a bigger push on flowing denim offerings.
The company provided second-quarter diluted earnings per share guidance at between 19 and 21 cents. For the year, diluted EPS is forecasted at between $1.42 and $1.45.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)