American Eagle says first quarter sales would be $ 1 billion high

American Eagle Outfitters announced on Wednesday that its business is higher than its expectations for the first fiscal quarter, as the stimulus controls and the pent-up demand stimulate sales of jeans, more attractive tops and leggings.

Revenue is on track to reach $ 1 billion, he said. According to American Refinitiv, analysts called on American Eagle to earn 23 cents a share on sales of $ 904.1 million. The company did not provide a new revenue estimate.

Its shares jumped more than 8% in trading after hours.

The retailer of clothing and teens said demand for goods from its namesake American Eagle and Aerie, which sells comfortable underwear and casual wear for young women, was stronger than expected. This is partly due to external factors, including economic stimulus, renewed consumer optimism and the ingrained demand from customers.

The American denim business of American Eagle was particularly strong, and buyers also started buying more tops, CEO Jay Schottenstein said during a telephone interview with CNBC.

“There’s a lot of money out there,” he said. “We think the environment will be a very good environment for the next few years. … People will want to spend [and] people are going to want to go out and they want to return to what was previously normal. ‘

The trends are another sign that people are ready to dress again, after sitting around in sweatpants or pajamas for months during the Covid pandemic. Other retailers, such as Levi’s, have recently made similar comments about the popularity of denim, especially among Gen Z customers.

In Aerie, which has grown much faster than American Eagle, the momentum for leggings has not slowed down, said Jennifer Foyle, its global brand president. Retailers like Lululemon and Gap’s Athleta have also benefited from the leggings boom. These bottoms are clearly no longer just for yoga, as more and more women are wearing them basically everywhere.

Last summer, in the depths of the health crisis, Aerie carved out a new athleisure brand called Offline by Aerie. The brand sells printed sports bras, sweatpants, graphic t-pieces and other active equipment. Although sold in Aerie stores, American Eagle plans to open approximately 25 to 30 Offline through Aerie stores this year.

Although the field is very relaxed, Foyle said the market is huge. “I think there is room for us to take a market share,” Foyle said.

She added that the company is still on track to double its Aerie business to $ 2 billion in annual sales by 2023.

In addition, American Eagle said it has improved its profit margins by selling more items at full price and relying less on promotions.

American Eagle shares have risen more than 270% over the past 12 months. It has a market capitalization of $ 5.5 billion, which is larger than its rival, Abercrombie & Fitch, with Hollister.

American Eagle presents Thursday in a virtual firefighting conversation at JP Morgan’s 7th annual merger. The financial results for the quarter ending May 1 are expected to be reported on May 26, after the market closes.