American Eagle Outfitters, Inc. (AEO) has reported record-breaking second-quarter revenue and a significant increase in operating profit, leading to an update in its full-year operating income outlook. The financial results for the second quarter of fiscal 2024 ended August 3, 2024, compared to the same period last year, demonstrate the company's strong performance.
The key financial highlights for the second quarter include: Total net revenue of $1.3 billion, up 8% from the previous year. Operating profit of $101 million, marking a substantial 55% increase from the prior year. Aerie achieved an all-time high second-quarter revenue, with comparable sales up 4%. American Eagle continued to see strong momentum, with comparable sales increasing by 5%.
Additionally, AEO updated its full-year operating income outlook to the high-end of the prior guidance range, now expecting it to be in the range of $455 to $465 million.
In terms of revenue breakdown: Aerie revenue reached $416 million, up 9%, with comparable sales increasing by 4%. American Eagle revenue amounted to $828 million, representing an 8% increase, with comparable sales growing by 5%. * Store revenue rose by 7%, while digital revenue surged by 12%.
The company's gross profit increased by 10%, reaching $499 million, and reflected a gross margin rate of 38.6%, expanding by 90 basis points. Operating income experienced a substantial 55% increase, reaching $101 million, with an expanded operating margin of 7.8%, up by 240 basis points.
AEO's shareholder returns for the second quarter included returning $120 million in cash to shareholders, bringing year-to-date returns to $180 million. This comprised the repurchase of 4.5 million shares in the second quarter for $96 million, with 24 million shares remaining for repurchase under the current authorization.
Looking ahead, the company expects operating income for the third quarter to be in the range of $120 to $125 million, and comparable sales to increase in the range of 3% to 4%. For the full year, AEO anticipates comparable sales to increase by approximately 4%, with total revenue up 2% to 3%.
The financial report also outlined AEO's capital expenditures, which totaled $61 million in the second quarter and $97 million year-to-date. For fiscal 2024, the company expects capital expenditures to approximate $200 to $250 million.
The market has reacted to these announcements by moving the company's shares -4.9% to a price of $20.64. For the full picture, make sure to review American Eagle Outfitters's 8-K report.
