New technologies designed to enhance the retail shopping experience have delivered successful results at American Eagle Outfitters (AEO), which had otherwise flat revenue results during the second quarter, executives said Wednesday (Sep 7) during the call. quarterly earnings of the company.
During the second quarter, AEO introduced a mobile point-of-sale (POS) system in its stores that allows associates to help customers pick up or return items anywhere in the store, not just at the register.
“We hope this will improve transaction speeds and minimize wait times, especially as we head into our peak fall and holiday sales seasons,” AEO executive vice president and chief operating officer Michael Rempell said during the earnings call.
Additionally, AEO’s mobile app had a strong quarter and is now the largest revenue source in the company’s direct channel.
Overall, the company’s digital channels have posted a five-year compound annual growth rate (CAGR) of 20% and now account for $1.8 billion of AEO’s $5 billion in revenue, according to the filing.
The company also highlighted its nine-pronged omnichannel shopping offering in the presentation, which gives customers the convenience of buying and getting products when and where they choose. Newest among these are same-day delivery and customer self-checkout, two offerings that are now in the pilot stage.
In other news, consumer concerns about the economy hit this year’s back-to-school shopping season, AEO executives said during the call.
After enjoying a record second quarter last year in which revenue grew 35% year-over-year, the clothing, accessories and personal care retailer saw revenue plateau during the same quarter this year, according to the company’s second quarter 2022 investor presentation.
Executives attributed these results to last year’s demand being buoyed by the latest pandemic-era stimulus checks, and this year affected by the uncertain economic environment.
“This is an unprecedented time in retail,” AEO Executive Chairman of the Board and Chief Executive Officer Jay Schottenstein said in an earnings release on Wednesday. “As we cycled through last year’s exceptional demand, a more difficult macroeconomic environment is weighing on consumer spending behavior.”
In response to falling demand, the company shed excess spring and summer inventory with lower-than-expected margins, Schottenstein said.
Going forward, AEO will continue to invest in new technology and reduce expenses and capital expenditures, adjust inventory size, and offer products appropriate for the current season and trends.
“In a changing macro environment, we are focused on controlling the controllables,” Schottenstein said in the earnings release.
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