Following disappointing results during the first quarter of fiscal 2014, which were consistent with the company’s expectations, American Eagle Outfitters has decided to close 150 stores in North America during the next three years, including nearly 100 AE stores.
For 2014, the company plans on closing approximately 50 AE and 20 aerie stores in North America. The store closings will translate to annualized after-tax savings of between $10 and $15 million beginning in 2015.
Net income dropped 86% to $3.87 million from $27.98 million, and total net revenue fell 5% to $646.13 million from $679.48 million. Same-store sales fell 10%. A significant decline in pretax income drove the company’s net income drop.
“Results were consistent with our expectations,” said interim CEO Jay Schottenstein. “The quarter reflected weak sales and increased markdowns. We are committed to improved profitability and are working hard to implement our plan to strengthen our brands, channels and operations. Specific actions underway include continuing to build strong omnichannel capabilities, rationalizing our store fleet, reducing expenses, growing international licensed stores, and most importantly, delivering great merchandise and customer experience across our brands. Our focus is on leveraging our strong brands and talented team in order to deliver long-term profitable growth and enhanced value for our shareholders.”