American Eagle says it’s seeing ‘more than our fair share of pent-up demand’ as stores reopen, shares soar
Matthew Mitchell, center, talks with customers as Sierra Phillips adjusts a denim display at the American Eagle/Aerie store at Easton Town Center in Columbus, Ohio on May 15, 2020.
Andrew Spear | The Washington Post | Getty Images
American Eagle Outfitters thinks it is the best retailer in the mall. And its stock is soaring.
“We think we are getting more than our fair share of pent-up demand,” American Eagle Chief Financial Officer Mike Mathias said Wednesday morning during an earnings conference call with analysts, explaining how sales are bouncing back quicker than expected amid the Covid-19 crisis.
“And there was a lot of stimulus,” he went on. “We had competitors close … but clearly we’re the strongest store in the mall, and our customers are continuing to come to us.”
American Eagle shares were initially falling after the earnings results were released, but later shot up more than 15% in early trading.
Management explained that as stores reopen during the coronavirus pandemic, sales are averaging an impressive metric of roughly 95% of their normal levels. American Eagle said it has opened 556 locations to date. It has nearly 1,100 in total.
The strong recovery as American Eagle’s flagship apparel shops and Aerie lingerie locations reopen in malls across the country aligns with what rival Abercrombie & Fitch revealed last week it was seeing, with sales likewise bouncing back faster than expected.
But others in the mall are not faring as strongly. Macy’s, for example, has said its sales are down about 50% in its recently reopened department stores. And chains found in the mall including Neiman Marcus, J.C. Penney and J.Crew have filed for Chapter 11 bankruptcy protection during the crisis.
Teen consumers, however, appear ready to spend at American Eagle and Abercrombie. They’re shopping for summer garb and soon will be stocking up on back-to-school essentials.
“We work all year to make sure that we’re gonna have the best jeans every back-to-school,” American Eagle Chief Executive Jay Schottenstein said Wednesday.
American Eagle and Abercrombie also both called out social media platform TikTok as a way they are reaching more customers, specifically tweens and teens. American Eagle said it collaborated recently with TikTok’s biggest star Charli D’Amelio for a video on its Aerie swim collection, receiving almost 2 billion impressions.
“Customers remain loyal and the affinity for the brand will likely be cemented by its authentic marketing focused on real people – something that has more resonance in the post-pandemic world,” GlobalData Retail Managing Director Neil Saunders said about American Eagle’s results.
American Eagle shares are down about 19% this year.