American Eagle Outfitters (NYSE: AEO ) reported robust first-quarter results for 2024, showcasing significant growth that surpassed market expectations. The company's new strategy, "Powering Profitable Growth," is on a clear path to success, aiming for a 10% operating margin by 2026. Key financial highlights include a 7% increase in comparable sales and a notable 310 basis point improvement in operating margin.
Revenue reached $1.1 billion, and the company's balance sheet remains strong with $300 million in cash and zero debt. American Eagle and Aerie, its sister brand, both contributed to this solid performance with growth in their respective sectors: casual wear for American Eagle and activewear and soft dressing for Aerie.
Key Takeaways American Eagle Outfitters exceeded Q1 expectations with a new growth strategy. Revenue hit $1.1 billion, with comparable sales up by 7%.
Operating margin improved significantly by 310 basis points. The company is on track to meet its full-year guidance, expecting total revenue and profit growth to be higher in the first half of the year. Aerie's and American Eagle's digital sales showed high-teens growth.
Plans for store openings and closures include 25-30 new Aerie stores and 20-25 American Eagle closures. Company Outlook American Eagle anticipates a full-year operating income of $445 million to $465 million. Q2 operating income is projected to be between $95 million and $100 million.
Revenue is expected to rise in the high single digits i.