PITTSBURGH - American Eagle Outfitters , Inc. (NYSE: NYSE:AEO), a leading global specialty retailer, announced today its new strategic plan aimed at driving profitability and revenue growth over the next three years. The Powering Profitable Growth plan is set to achieve mid-to-high teens annual operating income growth with 3-5% annual revenue increase, targeting an approximate 10% operating margin.
The strategy is built on three pillars: growing the American Eagle brand with a focus on denim and expanding into adjacent categories, fueling the growth of Aerie and accelerating the activewear segment with OFFLINE, executing with financial discipline for consistent profit growth and shareholder returns, and optimizing operations through leveraging operating capabilities.
According to Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer, the plan revolves around amplifying the company's presence in casual apparel and expanding into new market segments. Schottenstein expressed excitement over the new focus on performance and the potential for creating long-term shareholder value.
In line with the new strategy, the company provided fiscal 2024 operating income guidance of $445 to $465 million, which includes projected revenue growth of 2 to 4% despite a retail calendar shift. The first quarter of 2024 is expected to see operating income between $65 to $70 million, with revenue up mid-single digits, partially benefiting from the calendar shift.
The financial results and long-term strategy were discussed in an extended call with AEO's executive leadership team, details of which can be accessed in the Investor Relations section of AEO’s website.
American Eagle Outfitters operates stores in multiple countries and ships to around 80 countries worldwide.
This news is based on a press release statement from American Eagle Outfitters, Inc.
InvestingPro Insights
As American Eagle Outfitters (NYSE: AEO) unveils its new Powering Profitable Growth plan, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, AEO has a market capitalization of $4.63 billion and is trading at a P/E ratio of 21.11, which adjusts down to 18.26 when considering the last twelve months as of Q3 2024. This P/E ratio is particularly relevant given the company's focus on profitability in its strategic plan.
InvestingPro Tips highlight that AEO has maintained dividend payments for 21 consecutive years, indicating a strong commitment to shareholder returns, which aligns with the company's strategic goal of consistent profit growth and shareholder returns. Additionally, the stock has experienced a significant return over the last year, with a 76.23% price total return, underscoring the potential for creating long-term shareholder value that CEO Jay Schottenstein mentioned.
For investors seeking more comprehensive analysis and additional insights, InvestingPro offers a range of metrics and tips. There are 12 more InvestingPro Tips available for AEO at https://www.investing.com/pro/AEO, which can further guide investment decisions. Interested readers can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing an even deeper dive into AEO's financials and market performance.
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