We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Online Trend Continue Aiding American Eagle (AEO) in 2021?
Read MoreHide Full Article
The coronavirus pandemic has ushered in a new wave of consumer shopping patterns, with online retailing becoming one of the hottest trends at the moment. With consumers’ continued consciousness about health and safety, the current online boom is here to stay. American Eagle Outfitters, Inc. (AEO - Free Report) is one of the many retailers eyeing further digital acceleration in the near term as digital demand remains strong and above pre-pandemic levels.
Notably, the company delivered strong consolidated digital sales growth of 29%, accounting for 37% of total revenues in third-quarter fiscal 2020. Moreover, it witnessed online growth in Aerie and AE brands to the tune of 83% and 11%, respectively. Also, digital channel customer acquisitions jumped 37% in the said quarter.
Management recently introduced the same-day delivery option for online orders and enhanced its website in a bid to improve the page load speed. Apart from these, its four new distribution hubs are likely to help meet consumers growing online demand. These initiatives are likely to help in capitalizing the online shopping trend, which is expected to stay.
Other retailers benefiting from this COVID-led online trend include Nordstrom (JWN - Free Report) , PVH Corp. (PVH - Free Report) and DICK'S Sporting Goods (DKS - Free Report) . While PVH Corp.’s sales declined 18% in third-quarter fiscal 2020, digital sales grew 36% year over year. Further, e-commerce sales for Nordstrom grew 37% in third-quarter fiscal 2020, representing 54% of overall sales. Also, e-commerce sales for DICK'S Sporting’s skyrocketed 95% year over year in third-quarter fiscal 2020.
Coming back to American Eagle, continued strength in its Aerie brand remains a growth driver. Notably, fiscal third-quarter sales rose 34% for Aerie, marking the 24th successive quarter of double-digit growth for the Aerie brand. Further, Aerie’s customer acquisitions across all channels increased in double-digits, reflecting growth of 15%, with 62% growthin the online platform. Meanwhile, the AE brand also witnessed strong digital demand and gained in key categories such as jeans and bottoms. Encouragingly, it launched a new activewear collection, namely OFFLINE, with the first store receiving positive customer response. Such upsides are likely to enable the brand to reach the next milestone of $1 billion in sales.
However, it is grappling with soft mall traffic stemming from the COVID-19 situation. This led to sluggish store revenues to the tune of 16% in the fiscal third quarter. Further, the company is incurring extra expenses related to performance-based incentive compensation.
Moreover, the Zacks Consensus Estimate for earnings in fiscal 2021 is pegged at $1.24 indicating a rise of 3.3%, in the past 30 days, which is likely to raise optimism for the stock.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Will Online Trend Continue Aiding American Eagle (AEO) in 2021?
The coronavirus pandemic has ushered in a new wave of consumer shopping patterns, with online retailing becoming one of the hottest trends at the moment. With consumers’ continued consciousness about health and safety, the current online boom is here to stay. American Eagle Outfitters, Inc. (AEO - Free Report) is one of the many retailers eyeing further digital acceleration in the near term as digital demand remains strong and above pre-pandemic levels.
Notably, the company delivered strong consolidated digital sales growth of 29%, accounting for 37% of total revenues in third-quarter fiscal 2020. Moreover, it witnessed online growth in Aerie and AE brands to the tune of 83% and 11%, respectively. Also, digital channel customer acquisitions jumped 37% in the said quarter.
Management recently introduced the same-day delivery option for online orders and enhanced its website in a bid to improve the page load speed. Apart from these, its four new distribution hubs are likely to help meet consumers growing online demand. These initiatives are likely to help in capitalizing the online shopping trend, which is expected to stay.
Other retailers benefiting from this COVID-led online trend include Nordstrom (JWN - Free Report) , PVH Corp. (PVH - Free Report) and DICK'S Sporting Goods (DKS - Free Report) . While PVH Corp.’s sales declined 18% in third-quarter fiscal 2020, digital sales grew 36% year over year. Further, e-commerce sales for Nordstrom grew 37% in third-quarter fiscal 2020, representing 54% of overall sales. Also, e-commerce sales for DICK'S Sporting’s skyrocketed 95% year over year in third-quarter fiscal 2020.
Coming back to American Eagle, continued strength in its Aerie brand remains a growth driver. Notably, fiscal third-quarter sales rose 34% for Aerie, marking the 24th successive quarter of double-digit growth for the Aerie brand. Further, Aerie’s customer acquisitions across all channels increased in double-digits, reflecting growth of 15%, with 62% growthin the online platform. Meanwhile, the AE brand also witnessed strong digital demand and gained in key categories such as jeans and bottoms. Encouragingly, it launched a new activewear collection, namely OFFLINE, with the first store receiving positive customer response. Such upsides are likely to enable the brand to reach the next milestone of $1 billion in sales.
However, it is grappling with soft mall traffic stemming from the COVID-19 situation. This led to sluggish store revenues to the tune of 16% in the fiscal third quarter. Further, the company is incurring extra expenses related to performance-based incentive compensation.
Markedly, this Zacks Rank #3 (Hold) stock has gained 31.4% year to date compared with the industry’s growth of 33.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, the Zacks Consensus Estimate for earnings in fiscal 2021 is pegged at $1.24 indicating a rise of 3.3%, in the past 30 days, which is likely to raise optimism for the stock.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>