FILE PHOTO: An American Eagle Outfitters employee waits for customers at a cleaning station outside a store in Arlington, Virginia, U.S., June 1, 2021. REUTERS/Erin Scott/File Photo
November 23, 2021
(Reuters) -American Eagle Outfitters Inc said on Tuesday its inventory levels jumped ahead of the crucial holiday season as it spent more on air freight to overcome supply chain disruptions, after posting better-than-expected quarterly results.
Shoppers have started to splurge again on streetwear, including jeans and shirts, with store visits on the rise after vaccinations and the easing of COVID-19 curbs. But congested ports and factory closures in Asia have resulted in unsatisfactory inventory levels for some retailers, including Abercrombie & Fitch Co and Urban Outfitters.
Abercrombie said on Tuesday its inventory levels as of Oct. 30 were $544 million, largely flat compared to a year earlier, while American Eagle said its inventory at the end of the third quarter increased 32% to $740 million.
Many U.S. apparel sellers, including T.J. Maxx-parent TJX Cos Inc and Macy’s Inc, have also reported an increase in inventory levels. Some big retailers also chartered their own container ships and ordered products well in advance for the busiest time of the year.
Shares in Abercrombie declined 6% before the bell, while those of American Eagle were down marginally after jumping around 4% earlier.
For American Eagle, net revenue increased 24% from a year earlier to $1.27 billion in the third quarter ended Oct. 30, beating market estimates of $1.23 billion, according to Refinitiv IBES.
Helped by strong demand across its eponymous and Aerie brands, American Eagle earned 76 cents per share, beating analysts’ average estimate of 61 cents.
Abercrombie’s net sales, meanwhile, rose 10% to $905.2 million, beating estimates of $896.9 million. It also announced a new $500 million share repurchase plan.
Abercrombie’s digital revenue increased 8%, while American Eagle’s rose 10%, although both indicated a slowdown from a pandemic-fueled boom in 2020.
(Reporting by Praveen Paramasivam and Reshma Rockie George in Bengaluru; Editing by Ramakrishnan M.)
Source: One America News Network
