Textile News, Apparel News, RMG News, Fashion Trends
Fashion & Retail Trade & Business

AEO profit declines 26% in Q2 FY22

The gross profit of American Eagle Outfitters (AEO) was recorded at $370 million in the second quarter of fiscal 2022, a decline of 26 % from $502 million in fiscal 2021 and reflected a gross margin rate of 30.9%.

AEO profit declines
Figure: AEO recorded selling, general and administrative expense of $308 million, an increase of 5%.

Jay Schottenstein, AEO’s executive chairman of the board and chief executive office said, “This is an unprecedented time in retail. As we cycle exceptional demand from last year, a tougher macro environment is impacting consumer spending behaviour. Second quarter performance reflected these challenges, constraining revenue and amplifying margin pressure as we fully cleared through excess spring and summer goods.”

On the other hand, in the second quarter, AEO recorded selling, general and administrative expense of $308 million, an increase of 5%.

Also, SG&A increased 110 basis points as a rate to sales versus second quarter 2021 primarily due to increased store wages, corporate compensation, professional services and advertising, partially offset by lower incentive compensation accruals.

In a shifting macro environment, and to control the controllables. They have entered the second half with inventory levels in a much better position and an assortment that is current for the fall season.

Schottenstein said, “As an additional cautionary move, we have paused our quarterly cash dividend to strengthen our cash position. Our brands and products remain highly relevant and sought after by our customers. I am confident we will successfully navigate current challenges, and set AEO up for a stronger future.”

Assuming current trends, the third quarter gross-margin rate would be in the mid-30s and fourth quarter in the low-30s. This reflects higher markdowns in anticipation of a more promotional retail environment and the company’s seasonal clearance cadence which is more weighted to the fourth quarter.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

Related posts

US holiday retail sales grew 8.5% this year

Nurnahar Akter Tania

Crosby Studios & Zero10 to launch pop-up store in US

Nurnahar Akter Tania

Walmart and H&M orders fell by 10%

Nurnahar Akter Tania

Latest Publications

View All