American Eagle Outfitters had unveiled a long-term growth and value-creation plan for AEO and Aerie brands. Their financial priorities aim to double Aerie to $2 billion in revenue and reignite American Eagle for profit growth.
Aerie’s revenue is expected to increase at a 20% rate, providing significant profit flow throughout each quarter. So far, they’ve seen strong and consistent improvement, with 24 consecutive quarters of double-digit growth.
“2020 demonstrated the strength of our organization, our brands and our capabilities – and we are emerging with momentum. As the pace of change and innovation accelerated over the past year, I believe the environment is ripe with potential, and I see more opportunity for AEO than ever before. Today, I am pleased to provide greater transparency to our leading brands, our strategies and our long-term financial targets, aimed at creating lasting value for shareholders,” said Jay Schottenstein, AEO’s Chief Executive Officer.
The value-creation plan will be focused on leveraging the consumer, reigniting the power of people, culture and purpose. This includes focusing their efforts on a leading customer-centric omnichannel approach.
Aerie has quickly become more than just a brand – it is now a movement. The loungewear and intimate retailer started a body positivity concept, called #AerieREAL, where they made the decision to stop retouching their models. Their campaigns feature real people of all shapes, sizes, and ethnicities. They created an inclusive retail movement, and now dozens of brands are following in pursuit.
Part of Aerie’s $2 billion revenue initiative includes a roadmap of market expansion. Aerie’s newest brand launch, OFFLINE, features activewear for all individuals and lifestyles. Activewear is a $21 billion market and is growing rapidly. The timing of Aerie’s newest venture is likely to pay off in their favor.
Aerie also plans to increase their physical footprint. Currently, the brand has 350 stores and intends to have approximately 400 by the end of 2021. By 2023, executives hope to have between 500-600 Aerie locations.
The power of Aerie’s brand and its future potential has to do with the real emotional connection that they form with consumers. Shoppers feel empowered in Aerie clothing. As the retail landscape goes through ebbs and flows – Aerie’s messaging strategy should serve as a source of inspiration for all brands in 2021 and beyond.
Source: AEO Investor Presentation 2021, AEO Growth Plans Press Release
Photo Credit: #AeriealREAL Life
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About American Eagle Outfitters, Inc.
American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle® and Aerie® brands. Our purpose is to show the world that there’s REAL power in the optimism of youth. The company operates stores in the United States, Canada, Mexico, and Hong Kong, and ships to 81 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 200 international locations operated by licensees in 25 countries. For more information, please visit www.aeo-inc.com.
