American Eagle Outfitters (AEO) 29 May 242025 Q1 Earnings call transcript

Greetings, and welcome to the American Eagle Outfitters First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Judy Meehan. Thank you.

You may begin.

everyone. afternoon, Good

Chief for Chairman today Executive remarks Jay Mike are Director Joining Chief our Executive Executive Mathias, and Aerie; and AE President, Officer. Officer; Schottenstein, for me and prepared Financial Jen Creative Foyle,

realized to current company Before included we whether by based you The or obligation our expectations of These in undertakes on are or The revise will I that information statements, actually no statements. that based as law. forward-looking beliefs. remind upon we may certain represents publicly call, filings. begin statements forward-looking new factors as or update required today's risk otherwise, differ need except events to materially make SEC the result information, results company's any future a

last compared retail XX XX and ending XX quarter May the are with XXXX. weeks first XXrd today's XX weeks to XXXX, week the April ending X, presented XXXX. presented results sales for ending XXXX, Consistent X, to the XXXX compared May year, X, metrics and May are discussion Comparable for weeks the XX, ending calendar weeks the

website GAAP metrics call presented please certain release, is available are that attached release, www.aeo-inc.com the the on tables Reconciliation the to at financial corporate adjusted adjusted in non-GAAP posted Also, earnings accompanying which the note both press in and GAAP results basis. this during Investor on a Relations of and to are results in section. our the

find can also presentation. you the first investor quarter Here,

call to turn the will I over now And Jay.

share meaningfully priorities business growth point a strategy target operating we steady quarter afternoon, from for incredibly by that path These of past results proof aims new results. XXXX. flow-through. significant were posted momentum powering were our exceeded to company our good with guidance. I'm first and charts Judy, Growth, an strategic new margin solid the build we deliver growth our plan, driving everyone. our as Thanks, forward Profitable a last excited and are to and profit year and strong This March, We to pleased XX%

builder a AEO brand undeniable proven strength. is distinct with and

Eagle We powerful and and Aerie in tremendous have exceptional potential. growth connection brands customer American with

life level team's day. Our best-in-class creative to bring every brilliant the highest our design vision at operations

digital shopping across of none, second to experiences Our stores customer and by is decades powered insights.

strengths on the Our will in continuous focus magnifies set new deliver opportunities, business to strategy our these up after go ahead. operational to improvements and profitable the consistent growth growth years

execute pleased pillars, out how optimize priorities teams have on want am reminder, attacking underscore of we our wasted strategic operations; and X are against in third, discipline. momentum As detail Jen priorities. and deliver just to the will first, how gate. I I Mike our time by a these with The key brands; but no pillars: our defined more financial second, our amplify provide with

Let me touch highlights. on few a

First particularly categories, core banner apparel, soft quarter driven and Eagle, the growth. for dressing Aerie's new we comp saw strong strength brands growth American opportunities. Aerie's we revenue of $X.X and solid intimates What's stores seen long-term company, wear record OFFLINE's and growth foundation in active has Aerie OFFLINE Aerie, across as presents and the notable experienced by expansion billion increases meaningful the more reflected healthy channels. all digital reviewed saw under where We huge metrics. beyond across success is and a X%

and space, bring the OFFLINE are to fresh categories and fun. significant take body that is with and These Aerie a large white market positive

and we're and strong gaining in As we place in continue we momentum, invest to assortments, build continue to our share. brand to have plans awareness gain

Eagle made brand. great the on American to minute want quick also progress the take a have I celebrate to we

presents a our delivering there leveraging powerful extend dominance will amazing AE's wear. excellent opportunity. by growth are as legacy As growth platform driving is and sizable we This focus results. And initiatives to shared March, renewed cover, in in Jen on early casual

of stores. Strength a are market in share focus our both growing categories. and digital and was gaining with broad-based momentum We number growth across of channels

saw results. recent KPIs initiatives we improving aimed deliver Here, at our too,

more led to digital targeted online a and revenue. customer example, double-digit For tactics in strategic increase

quarter early our on part as significant our financial initiatives priorities. first saw a strategic base, leverage priorities. our Our We results across action strong on reflected cost of by fueled a results number of

business. Our strong fuel in investments us to allowed the cash position

dividends of approximately repurchases. Additionally, cash we through a to $XX returned shareholders million and in combination share

is $XXX million with debt. sheet in healthy cash and balance Our no

start time This we a income. for on year, American the revenue in an full our Outfitters. With feel guidance very and to Eagle our solid confident exciting for is deliver operating future. year are pace We to

We have will carry strategy a unlock us value team and the that right for we focus, as our talented highly through shareholders. a greater clear

to over Jen. Now

Thanks, task Jay, to iconic of reviewed initiatives our strategic we everyone. we amplifying the truly It's and afternoon, last nice business brands. see across The quarter. the great have teams good the implement taken momentum as you with

and fueling significant we across and the our while headway great making the are We opportunities experience. assortment store elevating see digital

first driving Eagle incredibly brought expansion. with across as core merchandise fueling Aerie. We and and well maintained chased growth collections how we innovation delivered American as to We I'm into efficiently, margin quarter. pleased ideas inventory the winning discipline new adjacencies,

grew marketing strong shopping our file and exciting marrying products winning with experience. activation also customer We a brands, across

improvement look the the highlight as a I and drivers major XX/X, on ongoing particularly point in dressing basis to with within also for customer the pants, Both X% the and strength Across I our focus collection. age seeing XX%. skirts which a casual areas, to these as are seeing I'll key growth is like acceleration In Men's in reviewed jeans. dresses, strength Starting these us. social response included are on and encouraged long-term in sweaters brand, positive capture we tops, opportunities also we a margin by priority demo. activewear our we growth growth by especially occasion of I'd a wider outerwear. add nice American to of overall, led revenue teas, X% women's a are in fueled comps. to operating momentum to that plan. am men's in XXX AE increase flow-through AE our Eagle. Key saw knit

to brand other priorities. Turning

know, our As are you modernizing inventory improving allocation. stores we and

exciting taken modern of store fresh from so The with is fleet across remodeled seeing stores KPIs. the update balance lived-in a action are truly to We the results design far. and new continuing several outperform

quarter, is Additionally, as discussed fleet on top-selling comp of styles our last I a our expanding availability focus delivering lift. nice across

in achieved record We Aerie. to last brand up on with fueled increase moving X% year, another revenue quarter X% rev yet by comps. a to Now

XX%, we we soft our new continue styles, trends Jay exiting strength saw businesses. trends margin been with XX incredible last including spring where to And the fan swim, favorite our were The core basis operating season, year. wear see in fabrications and have challenging active Excluding SMOOTHEZ up to increased XX.X%. with Aerie points traction noted, comps consistent as and In across collection. intimates, dressing

And looking trajectory. Aerie untapped ahead, there in we their opportunity remains as and growth for OFFLINE significant are confident

continue and out Aerie positive gate OFFLINE New the to come of stores expectations. to

opened We in testing a new a Aerie design an have We been ago, also few our encouraging. that weeks indications unique are store way. and early assortment and Corner location in exciting this Tysons showcases

an marketing In to of body that Aerie and XXth decade-long forever shared included empowerment has on transformed from assortment shopping multi-stop exciting kicked Throughout investments experience, the events. our showcasing and testimonies first social the the commitment real-life our quarter, Gen we with life-changing exciting the the celebration Aerie has industry. of first we them on tour retail Real, This through our quarter, in customer we event, the anniversary impact we positivity running year. made in REAL customers this in-person off had As activation. also country and women's engagement fuel our the

spring collection trend, be culture. we organic and capitalizing Promoting at excitement of across influencers content our social continues to Eagle leverage denim Western on epicenter American to channels. build and popular the the

brand look back heritage forward As of celebrating AE's the to style, individual platform the acceptance we approach relaunch course, and, of we self-expression, optimism. of to school,

the growth, customers' wardrobe, of our fuel tailwinds quintessential part to our we As remains dressing natural casual providing a business.

the new the street. exciting seeing are positioned most are industry, emerge on the to Aerie, Eagle win. in brands American and beloved well to runway We the continue and Two on of trends

want you and team continues. a work lot thank yet Aerie the the And to Mike, had before We've I this be proud a work perseverance. I say turn hard and call the Eagle big American to their quarter, for to to over of

We new day ahead. breaking forging are every ground and

I'll with And Mike. that, turn the over call to

everyone. Thanks, afternoon, Jen, and good

Jay and reviewed, XXXX. As Jen start to strong a for we're off

coming and brands Our delivering great meaningful profit margin healthy results hand-in-hand across with strategy with new growth is expansion.

quarter contributed focus executing the track in and the optimizing on on with streams strong as and margin remain to work our Our we to SG&A second financial effect. in operations expansion into additional come begin leveraging quarter, discipline gross

comparable up was billion X% $X.X of year, revenue Consolidated by in to highlights. few growth. driven increase a a on Expanding X% last sales

in capture shift approximately the the calendar $XX the million higher spring week. of quarter, a last volume retail to contributed discussed revenue, As reflecting

Operating was million. million. an against $XX adjusted operating to rose last of XX% operating This represents year. increase $XX last to The X.X% a income basis year's XXX adjusted operating points income margin margin

really impact million transportation expanded gross making to rate our XXXX, to XXX business. improvements clearance of second product to our quarter XX.X%. more margin costs the speaks second was of Strong dollars Gross points highest This the XX%. which to basis of inventory increased profit $XXX profitable last Gross since to contributed our margin. had we're in rate margin Lower shift a a initiated to also model management and favorable and a year expansion. structural

expenses quarters, XX the business including over results. Operating continue our margin focus across within consistent million to X% year points and of by reviewed driven with line costs growth, costs. reducing several of the up gross sales to leverage SG&A deliver I costs on the expense with BOW our leverage, in past basis As roughly $XXX and guidance. and last distribution rent, delivery warehousing was on

in is for March, noted focus big As SG&A us. a

of remain board begin are our continually We good quarter. of being XX% and services addressing base marketing compensation, on fees to second work corporate professional that track areas store the SG&A leveraging optimization streams making We're have focus progress and and and in with across spend. expense the

year-over-year, points. Depreciation leveraging was down slightly basis XX

benefited tax quarter discrete first items. rate The from

per tax in adjusted XX% the the We to to remainder high was last rose of the this per year's $X.XX expect Earnings mid- XXs year. be and share, to for the first rate earnings. share quarter the for

buying with revolver. trends higher to maintain X% end-of-season including we Consolidated million our due and of and million quarter sheet, $XXX with approximately strategy, levels ending XX%. liquidity, a our healthy includes $XXX merchandise total in line more to balance This up shift with brands remain next was a holding profitable quarter. cost across anniversary We which over up will inventory in continue demand cash clearance to and chase. as discipline the Inventory at strong ended units year-over-year

be in million to $XX range totaled we million. spend of $XXX to continue the $XXX expect CapEx million, and year full to

we top its end-to-end mindset discussed, to driving strategic results. with the is a great assessment every team There's decision and ability incorporating power plan healthy of This As new importantly, financial organization discipline. the across every strong is line allowing bottom in is shift growth. an that optimizing the a cultural the across business we is us day ongoing. how and work we maintain operate to March, permanent And as now discussed

continuous formalized of identify results. office have mindset new accountability We and drive efficiencies this incremental and and into an rigor improvement,

on Now outlook. our to

We are steady strategic across progress pillars. our making

week. from of we're This noted, X%, of X pace approximately range revenue including $XXX reflects full an selling our X guidance the year income impact to Jay on million. in million less $XXX to to growth X% point operating As negative achieve

As we revenue be end outlook. control year of we flat expect our to SG&A continue the expenses, at low to full dollars

D&A in average remains count high still expected weighted to XXXs. the approximately be $XXX projections Additionally, our for and share is million,

be the total year, in to fourth As quarter. and X the growth I revenue year-over-year discussed and impact we selling expect of retail first either calendar week of last less skewed comparison, half the quarter, profit the to shift the reflecting

noted quarter, back in a comp single-digit implies last low year. this half As of the the assumption

the We're range Quarter-to-date, high operating the single of of $XXX about really million digits. into up we with revenue income in business pace million $XX with good the the guiding feel quarter. in to the second strength continuing

this our reminder, line the retail positive some of top a of As the year. week as we shift back-to-school, from to up of a the includes the which calendar pick $XX weeks busiest a impact million in are

that confidence the the With aligned across plan open direction delivering questions, towards underscore unlocking the strategy Before place significant company. have driving priorities is our our I growth, we a to profitable long-term The I up consistent, of for our are business. plans. and already solid in in focused want teams to in value

it And with up that, for we'll questions. open

from with the JPMorgan. Matthew comes first question line Our Boss Instructions] [Operator of

Great.

Mike, elaborate maybe across comping back what the product your cited in the and Just brands maybe to of into we in assortments year? across and just you year. that could of relative half that confidence on you current maybe SG&A, then seeing then, on half plan the in May, first So demand as Jen, the seen the the the you've move of And drivers trends, year? the leverage your back came how what comp you're quarter through quarter second things inflection during in to

Sure.

about Okay. Thanks, Matt. American And first. thinking Eagle

As I And strategy. Mike, said as to in it really up but well, Eagle both only March, really you on said the not back just did amplifying brands. about, we I deliver we're think American

back-to-school for seeing onward. in trends, jeans. there particularly continue early and in dominate We to believe assortments there. tailwinds be great We're women's, the I and look will

single on the to that the and Eagle lifestyle than demanding from side. was very customer the And were those important American results wow, have been was it outfit. expected. so time We that us. And completing been noted, something That's better rebuild

And expand to to going Matt. so in we're continue adjacencies, those

the And then our about that fleet, we response an from store customers. design, a is lived-in, new have getting incredible thinking

continue going to that. we're to again, on So deliver

in so think I set tailwinds that. the and back-to-school, there for up said As more we're look, the I product just how are just denim.

were that in in early round to more business, with great to reads that categories a and in Women's going are distort the men's. more, we We these to we've dominate did win need great trajectory. on men's just the We're categories. into need assortment out more seen the which so

those so the So we're into into buy, the continue We get to open course early to going back really trends back to businesses. as correct can drive leave half. build and we out we

QX. actually, outside comps QX. right in the in look, And And were on them were QX we businesses swim powerful. continue. those we build Aerie, and of in left where We line

to you're change season, we lead and back-to-school as some So see soft dressing pace into a -- to going I in that nice back think well as in business categories. new the

we're our categories. we in category. new ideas some that share, to love intimates, We our category. the not offerings being We're continue innovate our Even on position to customer new some sleep. in us, really some seeing we our There's core surprises these from fun have and market of seen around going has what one held slowdown and in that that in of really

just offerings We're going store in lots marketing. but the American with repitch also product So Eagle for our back-to-school only to the not brand.

heritage. really going back I roots, It's think getting you're to see. be phenomenal our Aerie. excited with what our and for you campaign looks The same to

So lots in store.

Matt, on comp Dollars our with with up for X%, line in of in guidance. line result result our right SG&A SG&A, exactly X%. plus was QX were

shift retail revenue include that revenue with looking SG&A includes the at $XX digits we're expense quarter, from growth. and impact calendar of shift, That the variable high growth up the single-digit shift in that million of Second mid-single mid-single some SG&A the on the quarter into revenue.

of SG&A planned year, dollars back half down. Then are the the

leverage. structured So we from are here, to

pleased of the saw then which the expense lot margin we of from in the that and a and looking significant a to second on. here. is and of of across the proud a quarter amount we'll lot quarter really first the think leverage We're really depreciation P&L, excited in from was leverage fact I see SG&A where gross

with Yih Barclays. Adrienne of line the from comes question next Our

party? is impact it I confusion. you with have degrees. -- have on that do much think my sell Obviously, it you How it does holding than you quarter? that have Great. to like your sales liquidating you anything third sheet how the macro? wondering, would a Jen, then that percent can reiteration second impact calculated that last can that of of is My the the tough of just be And much first it's Does of helpful, clarify the go to are to or that on somewhere when speak swim was one question sort just on rather If is XX can that. over visibility -- inventory full inventory, think basically year. the some with there's you Mike, too. that inventory. does -- do I ending But the balance contribute?

of Sure. start year reiteration with Thanks, the Adrienne. guide. I -- the talk can full

I our We we results, guidance QX our think and we're expectations top operating million. as income both said. pleased million and of very with line $XX exceeded on range to $XX

on So exceeded income. both nicely revenue and

of are for as The reiteration last cautious plan. our with half. should of lap the would year. in us August It's point we plans proof more on slightly It's the half in proof what year. a started that the ahead some we of expect. really back-to-school of always the for year for of year is -- of and a back really the July for we're terms expect results guide the we the half back We're point better a first what

path, it's half think the into back quarter and expectations kind I we So back-to-school, the of maintaining second just our executing update we of the our as the plans. see year. And on strategic can for

hit sell-off few second quarter. -- it can Jen, with carrying of line strategy. brand inventory now yes, with on inventory, yes, if will without there's was clearance the selling points here mid-single-digit in our That Adrienne, would demand. impact ourselves in a to you want around anniversary just I plus and versus sales inventory, we in have on a which X% And inventory quickly, profitably our or -- previous the

back half as we carrying Right ourselves. will it So inventory more be inventory apples-to-apples. second clear quarter and are ending more inventory then we now,

in the specifically, material The the on back of then single-digit swim half. not for all is, half front high impact impact at Aerie and

on wins seen into QX there. and QX, categories that then mentioned, will So excited we're about. double as as other nice get really We've down we we I core

Dana Group. the of question comes Our line with Telsey from Telsey next Advisory

As Eagle, channel new looking at you're comp channel? at you it? this and stores sales by American And difference your look openings transaction-wise or unbundling in Aerie what and how you digital, store and of the year the to traffic-wise saw change between any for

for Yes, channel specifics I brands Dana. close thanks, digital The Aerie -- and mid-single. to the can -- pretty both were were stores

comp digital. close and of bigger were plus X%. on in Swim a has stores terms impact was X%. Aerie's pretty plus So that Digital

and stores So stores. as the without plus XX% comp we more that slightly teens were about positive, comp Aerie high impacted AE the was being talk growth. digital high the swim, than in digital

comp a But digital and of Aerie more slightly mix Aerie, kind closures that's teens, XX, being closely. brand XX looking store -- X% Both OFFLINE at for so, net stores that's a of to plus new X%. was AE. Aerie And were continue stores we're plus then to something even So plans XX be XX positive, high XX similar. or channels

the that early success to expect as because and remodel more We we're continue in to to with the program stores. seeing that number reposition look our of down of results come we locations or success those

Got it.

one did call-out. key of do? mentioned on follow-up, tops denim you How Just with a pricing? is denim. some How the being new styles, the of And Jen, category

Sounds helping the like that it's tops business, margins also? Is driving too.

taken We've that in Absolutely. definitely really women's. winning We're back. category

but we that balanced fashion, better in -- that not where we balanced in we We mentioned, been men's, category, had either, the chase definitely sort right we're make more we're can in a QX. are learning you'll than over in sure more the of that to situation. early -- that those Some in past, going see nimble very a remain but as learnings I

there feel what QX, will tests a it we see. that mentioned I there's new learnings. And We've assortments. like I you'll new definitely more tailwinds. into like earlier. the get I fits, bunch drive out I had of As see

is it's already are dominating to a head I think I which trends. it. those these cycle, and continue a us, We're in for category. about obviously to our women's winning dominant And like said, we're trends, category into seeing we will drive particular

comes Citi. line Paul Our next the with question of Lejuez from

comps am were X%. up seeing right, Aerie this I If

Aerie you throughout total saw what revenue brand saw on up the then talk think And by negative business? month the I impact. you could Why quarter if any by the is you spread curious weather if and X%. about

difference total plus in X% year. revenue an last fully the Aerie is the yes, versus comp from Paul, plus X% revenue impact sell-off

last had -- the first profitably versus in as not our we change the clearance we sell-off. So operational selling quarter, still around own year made

last So book the we did loss. revenue -- we at year did sell-off a have quarter in first

as -- expect more expect last So impacted that spread in which X this that of differential the and We this to normalize year We'd quarter, second that the the impact Aerie's about you is go forward. first year anniversary year. that be rest the point differential have we for won't year. impacted driving directionally in quarter, Aerie that still that to

of spring think in I answer quarter think question, when results couple March, pleased by the of a then I shifts. Definitely Easter and month, that yes, that's terms a a got there weeks little coming of And always calendar to rocky always above break We're the weather, expectations. our rocky it's you've in but with total kind phenomenon. April

by brand? May XQ you talk about to in anything And can date,

Yes, we've trend. continued with to quarter commensurate Pretty the been momentum, similar seeing. what first

So that into second we're with pleased very the quarter. coming

mid-single. guidance based is Our on

So again, the in in, the year early in weeks certainly general. X.X in quarter,

second way quarter we guide got the have a both long to the full still go. and year, So

the quarter, time our bigger of and second back-to-school coming then in back-to-school and kind holiday. of obviously, big and weeks summer Some is year

the -- lot start with very business of us. year, of pleased pleased So a ahead of the with

line Our next Kim TD from Jonna of comes question with the Cowen.

year a was like the your last year this it looks and and you you Just of any curious the you've what And that expectations more have for on saw lot exciting promotion remainder this uptick AUR marketing the year. of seen initiatives. if side, quarter are

And how year-on-year. by you spend, any increase looking Just are around color channel? you're to the if allocating spend

I a plans. result is our our margin and think testament gross strategies to promotions, our On

margin change our as as came gross work. much multiple with margin We IMUs margin healthy were And margin, basis within gross and quarter from clearance, facets book costs initial of a because off strategies margin revenue, expansion. profitably and have the sourcing versus transportation product actually was selling XX a structural points. XXX we basis at controlled those That and freight loss. in gross benefit the points that expenses by that at clearance of selling historically through and then leverage didn't And to goods we in gross there

We've pleased changes that in Those are a like Promotions talked check. jeans permanent not benefit made time. clearance quarter. long made jeans things that changes are result structural changes. are markdowns giving there's very do within anymore. All BOGO from which then those we So and that and we've not that first to a out. are we've gross the our as changes plan away very revert, loyalty we've happy we're And day still change running seen in for with with were all about our the in program, margin. we to day where No on much to has bras those to free free or structural results the well

marketing -- marketing to of dollars better that fund media, and performance the gotten to advertising that in we marketing spend. then other better In want We kind about we're in being dollars not more. plan we're expense and leverage reduce I've spend spent to It's places -- a actually brand continue talked and marketing place we to the spend, in space, measuring at place do general. return media looking as spend. marketing effectively and spending looking we digital reduce are is or more. It we to have that as a our get from we've

ways of a spend at and great we're spend, look advertising So to to across the that we'll continue kind results seeing generating we're dollars of return. disbursement where

Next with of Nardone question the America. from comes Chris Bank line of

half, your SG&A. the of year? are growth the you you guys think through upper to year, How Can full you seeing think just walk versus the should the I we follow-up Mike, for outlook SG&A alluded guidance? the a in last And specific down. SG&A then approaching where dollars on you're dollar savings back of if of end about sales some drivers for

We're operating Yes. to a think about leverage contribution will quarter period Sure. That single-digit on significant here, entering improvement. We're as talking good the in rate produce quarter. SG&A said. be growth structured to I second revenue mid-single-digit from Look, leverage now we a we're the in will leverage expectations. high where second

are a both the both are single-digit for dollars on quarter in quarters. down half SG&A Third basically dollars back -- single assumption down. slightly low low digit,

kind So low we're the single-digit assumption revenue have we fourth of flat revenue that then quarter actually And in with then off comps. actually looking total to leverage dollars calendar a SG&A that on QX, in retail that be in slightly total shift, actually would and the reminder down assumption.

me upside from that part the every until now expectation the that we -- a business is more on of there, revenue months point So of exciting we see leverage structured are is to cautious the any comp knowing about -- for revenue here. right few

we at would to to leverage. expense from bottom looking healthy flow-through So a expect for we're guide, SG&A end of Chris, revenue the yes, the leverage rest significantly on quarters. line of then just And the across -- high the the year remaining X

And back back half? Or Eagle Aerie the Is it. one between that single in digits. different uniform above Got the you brands? expecting then trends quick low and half on a comp just both expectations across are

some the saw through to because comps last pass half. the the expect comp pressure half continue was of year, Again, less the double-digit back first second back out we went the We'd higher the end. quarter. back a on comp the right in impact XX% of brand of Swim plus to and swim to into contribution be We're becomes swim. Aerie's in we QX quarter. on you Aerie Like the as seeing when through second that

reason So to there's exceed of expect no comp we wouldn't see Aerie's kind AE.

we're AE in well. the seeing is that of momentum brand side flip the But as

back the early got grow reasons I in are across in guide to So we've cautious, strategies why place brands I brands. because The in momentum think We've the the working. the -- it's the year. got half is

question, little we've answer in is below Aerie a exciting. would on on based got which to think think that, be but I So the you average, momentum both brands,

Our Marni with Shapiro next Retail line the Tracker. comes from question of

person, about age bit amazing. have you The Aerie was customer. a or noticed shopper, feeling broadening The that and I or of things stores a there's in X. an myself that, the some stay in seeing to tops like if longer the something to widening from skipping that really the shopper kind going wasn't wanted older, out the make Eagle today. old there that combination posts older beautiful. looked but look are are reflection of They're that into I've congrats. and and teen XX or like the you the they're a for from non-high teens little school to sound your sure a bit I range between. like a Jen, XX like -- said an going -- of I'm about teens come that little Eagle going is it hole talk media Or Are OFFLINE?

you a of bit about can little just So age? widening this is head at where with your talk the

have Right. Sure. I Marni, XX-year-old. world. a welcome to my

what to sure Just to seeing. have strategy, with our the we'll always I'm always are enter can going serve we and Look, back core love course, that offerings I so staying and customer, we they to customer our make will that we that dedicate us.

core want to back put they now everyday to focus thinking do strategy active, social our offer is us. occasions, I occasions, forth, casual, think stay And our men's new casual. with that we we how

slightly. we group age bracket brought the that. We're as customers stay And of of increase seeing think age the seeing actually us, I with assortments, are to -- we're those and actually next in going

it's in we are us. jump So more age. past, I did for sticking assortment, they And an like certain that's stay said, and a around, with -- that our out I working. been the focus And the they and they more because us initiative and broaden will on this, the think has

So and more this into head quarters. around we you'll see as future offerings assortments

think... I

stay very Will and of just the assortment product shopper younger a the will reflective little expand marketing the bit?

expand. women. we're we particularly I will occasions. And continue And competency ageless, core to so offer Product on to offer because the demo think customers focused our denim going as in customers of fit were a balanced more see new in we you're fits, past, as is getting one these other age course, business. we -- And new

assortment, getting jeans. we just innovation we're more wash, between that that more broadened the -- value, know, there. customers. price, They for I they and our all think now that And quality, reasons love we've our

for category. that be some might this it because We're tailwinds So well this like that seeing bode will I having in we think brand. I

of comes JJK Janet question Kloppenburg the from next Research. with line Our

dollars aspect wanted we great you in for even Congratulations on sales the back that you quarter the But I have could hear and couple -- an the weather just you it Maybe Jen, a what about but the and give much. on about a leverage swim up row every about in into would you'll of I And put the think us going a on should modestly. half. time area Mike, quarter in second also think years in in business, And business work hard said know progress SG&A digits quarter. the you of I has up that forward. business. you're how and idea how hurt the your and with down, in of the thinking wonder presume, in category now. occasion that I fourth social I men's be to focus mid-single it just you

guiding that's quarter. you're think modest I fourth what to. Very

Great Certainly, that dedicate category. that's Yes. time for the we appropriate call.

in new in XXXX. next the just expanded Aerie I a through eyeballs correct but new And well. we new you their have We assortments. continue what saw And we're digitally seeing. strategies that as I'm stores offering it, ideas. categories course not again, team I into we we new will, will in have see I went as on that year. for place, like only

So year great QX. and actually, also as the brand for a we next in starting win -- continue that be will

have in some wins great men's. we look, Men's,

is really was that more seeing. on into it's there. about script new I on. early wins saw really about distorting just we the the my we're it great them wins select XX/X those look, the getting I outerwear. investment of knit And doing categories, now think out mentioned gate, behind that

right, trends, can go in the you the more and we you'll leaning see on there. categories be forward, will see think I in marketing,

Let me on just specific be SG&A.

in with up impact being revenue negative again, -- the retail calendar and I second million But down dollars there's shift again, dollars QX, yes, on impacted single-digit both the single-digit with in expect yes, a be the comp. quarter. benefit QX. to retail cautious second high by digit So revenue, in $XX SG&A million SG&A mid-single low quarter $XX calendar a it's the the we'd think slightly the shift dollars impact,

expectation, that kind total comp of flat. in So revenue be would relatively

we'd set leverage. to be So

down On at guide comps. end specific fourth single significant top Hopefully, low single-digit be beyond Dollars of kind being you. quarter, same expectation. the guide. back of helpful that, that SG&A the both in being quarter, with to dollars for being high on the terms the down and could of and actually, end low quarter, low slightly in Again, revenue fourth XX% the down whole above set to in more pretty and that kind that's the of of of and leverage revenue quarters on half range third dollars

only sales numbers that happen And is the way the doesn't disappoint? if

Correct.

that then comp of significantly of we're how low end above X%. point of structured structured that's on the we're on our leverage So And every kind expectation. guide revenue to

some seeing costs you right And their their with just, in What's now, freight. Michael, brands guys? transportation are on going uptick

markup We Line first freight year of future the costs, benefits board including of are and kind leveraging for markup, gross of our of freight a we're were expenses inventory from and gross quarters. kind and transportation that. seeing the costs, mix headwinds no transportation and sight is from Again, initial of the in and benefit initial expecting not margin promotions quarter well-controlled margin. rest and across results

question comes the of from line next Straton with Stanley. our And Alex Morgan

I've just you got X here. for

Can can is drivers. to just intimates elaborate half we on what enables the just First, Just you that on there? what that as believe any helpful. you be That as just seeing is provide on highlighted. market much you're all I you would how well that color how that intimates? weakness the Aerie back on in business exactly so pull super trending happening on remind the qualitatively secondly, then in understand And the you of the or Can spend back us SG&A. comprises

Yes.

of margin distribution, talked gross with our back rent, work kind the start about half and margin, gross now off we So chain SG&A, talked year SG&A kicked see profit coming the our of being the priorities as benefits for a We and whole supply about initiative of the expenses really to we improvement last year drivers of last through around coming costs the later. year. delivery, those

work related in So year, labor, about being that reducing and our of services, we corporate across general items base as we the the supplies leveraging our with store plans the of advertising optimizing this landed line kind across talked expense SG&A incentives, compensation, our P&L XX% in for dollars, repairs.

A work is lot taking that of hold.

including general the majority here in of Some starting rest the of quarter pool. benefits for the in and it first in incentives that a the year, being in of really then quarter. second But compensation large and the

I the the costs work So of continuing starting and on second off established, really those streams, in work to to rest control base our through that's we've of year. efficiencies kind find benefits quarter those the continuing and think the continuous XX% improvement as SG&A here of coming the

SMOOTHEZ business. And there. business. that the what's where is you're launched forgetting it's But about about and to bit going pivoted. really as Aerie, core businesses about owned. we category, see the competency little X/X The newness Really we're customer intimates we of taking mentioned, excited roughly, we're not in has And the a changed I these

sports well about which you think OFFLINE If bras our are quarter, amazing. business, has incredibly this done

leverage we is it bras category and gives been us as both business that has did about going, businesses, OFFLINE, thinking and sports on customer that. The and amazing. certainly where ability So well, Aerie the the to

we We market X share in of in market fact, the fairly and category leggings points In ranked share high that in over this quarter. leggings. gained also category in in

into we as business. QX. again, and And about So that really QX excited it's a head natural

we Aerie seeing happy activewear. in to apparel, definitely new particularly the again, about back and we the intimates going in in to business. strategy, win want want that soft authority our apparel. happen, the And really OFFLINE to off growing in And We're We're business. be

other So about are at. and we I'm winning excited diving these all very areas into and owning that

of lots expansion there. opportunity So

rest really for to more out we So this come as year. the of build excited

Jen. Thanks, Great.

this So afternoon. that for interest. your your Thanks, for appreciate completes our everyone, participation, we and call

today's teleconference. concludes This

participation. Thank time. this at lines your disconnect you your for may You