American Eagle Outfitters, Inc. (NYSE: AEO) remains well-poised to tap the positive trends in the fashion arena, thanks to its digital endeavors and other robust strategies, including the Powering Profitable Growth plan. The company is gaining from immense brand strength and sturdy demand for its products that resonate well with the customers.
American Eagle's brand strength and gains from progress on its Powering Profitable Growth strategy have been bolstering its performance for a while. Its earnings beat the Zacks Consensus Estimate for the fifth consecutive time in second-quarter fiscal 2024. This was the company's sixth straight quarter of record revenues. The bottom and top lines also increased year over year. Let's delve deeper.
AEO's Powering Profitable Growth & Other Efforts
American Eagle is on track with its Powering Profitable Growth plan. The plan looks to deliver annual operating income growth in the mid-to-high teens to more than $570 million by the end of fiscal 2026. This translates to an operating margin of about 10%, implying an expansion of 300 basis points over the next few years.
The plan also targets annual revenue growth in the band of 3-5% through the end of fiscal 2026. This indicates revenues in the range of $5.7-$6 billion. The company remains committed to amplifying brands, optimizing operations and executing financial discipline.
In addition, its Real Power Real Growth value creation plan is focused on driving profitability through real estate and inventory-optimization efforts, omnichannel and customer focus and investments to improve the supply chain. As part of the Real Power Real Growth plan, American Eagle has been pursuing opportunities to grow the Aerie brand through expansion into newer markets, innovation and a growing customer base.
American Eagle's Brand ...
