© Reuters. FILE PHOTO: An American Eagle Outfitters worker waits for purchasers at a cleansing station outdoors a retailer in Arlington, Virginia, U.S., June 1, 2021. REUTERS/Erin Scott/File Photo
By Praveen Paramasivam and Reshma Rockie George
(Reuters) -American Eagle Outfitters Inc mentioned on Tuesday its inventory ranges jumped forward of the holiday season because it spent extra on air freight to beat supply-chain disruptions, after posting better-than-expected quarterly outcomes.
Shoppers have been splurging on streetwear, visiting shops extra after vaccinations and the easing of COVID-19 curbs. But congested ports and manufacturing unit closures in Asia have resulted in almost empty cabinets for some retailers.
Abercrombie & Fitch Co on Tuesday additionally posted quarterly income above market expectations however mentioned its inventory ranges had been largely flat from a yr earlier.
Shares in Abercrombie fell about 17%, monitoring their worst day in 2-1/2 years, whereas these of American Eagle (NYSE:) rose 5%.
Abercrombie is predicted to take successful of round $75 million within the fourth quarter because of increased freight charges, Chief Finance Officer Scott Lipesky mentioned on a post-earnings name.
American Eagle forecast further holiday-quarter freight prices of $70 million to $80 million. The firm, nevertheless, has been beefing up its logistics sport, after it agreed this month to purchase Quiet Logistics for $350 million, following its takeover of AirTerra earlier this yr.
Most different U.S. attire sellers have reported a rise in inventory ranges as they chartered their very own container ships and ordered merchandise prematurely for the vacations.
American Eagle mentioned its inventory on the finish of the third quarter elevated 32% to $740 million. “We are in a healthy inventory position … set up for a very strong holiday,” Chief Operating Officer Michael Rempell informed analysts.
For American Eagle, third-quarter internet income elevated 24% to $1.27 billion, beating estimates of $1.23 billion, in response to Refinitiv IBES. Helped by demand for its eponymous and Aerie manufacturers, it additionally beat revenue estimates.
Abercrombie’s internet sales, in the meantime, rose 10% to $905.2 million.
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