Aerie - American Eagle

https://www.ae.com/us/en/x/jeans


American Eagle showing CCX how to conquer plus size market in the good ol’ US of A -

Barrons:

”...Yet there’s plenty to like about American Eagle. In a retail environment littered with failures, American Eagle has been gaining market share. It’s the No. 1 women’s jeans brand in the U.S., and No. 1 for men ages 15-25. One reason: Body-positive products, including an extensive range of jeans sizes, as well as an array of cuts for a variety of figures, including “curvy” jeans, high-waisted jeggings, Mom jeans, and flares. The company says it has enjoyed 23 consecutive quarters of record jean sales. Ensuring that the company’s products remain popular are ambassadors such as hip hop star Lil Wayne, who is promoting the move to expand sizing in jeans. The retailer is also offering items like cannabinoid-infused lotions by Green Growth Brands, which is backed by the family of American Eagle CEO Jay Schottenstein. American Eagle declined to make Schottenstein available for an interview.Many of these stores are in malls, a source of concern for retail investors. But American Eagle appears to be on solid footing here. As of February, it operated 934 stores, while its Aerie intimates operation had 115 standalone stores. In total, 96% of its stores are profitable, the company says. Almost all of its leases in “Class C” malls—those with high vacancy rates and lower traffic than higher-tier malls—must be renegotiated in the next three years, says UBS. American Eagle has told investors it can get 5% to 20% rent reductions in C-class malls. Meanwhile, growth is healthy for A-class malls. “Volumes are solid, and the mall operators are telling us they’re leading in the denim category,” says Gates of Friess Associates.Hidden in American Eagle is one of the nation’s fastest growing retailers, Aerie. Last year, Aerie sales hit nearly $650 million, 29% higher than the previous fiscal year, compared with a 5% increase for American Eagle. In the first quarter, Aerie’s sales rose 14%, versus 4% for American Eagle.Analysts have forecast that Aerie can be a $1 billion brand. Gates is even more bullish, believing sales can grow to at least $2 billion, as the company opens new stores. UBS agrees: “By deeply associating with the body-positivity movement, Aerie has stolen consumer mindshare from Victoria’s Secret and positioned itself for major share gains,” its analysts wrote recently....”


Key point - aspirations to be a $1bn US curvey jeans brand
Analyst believes they can reach $2bn US, jeans brand!

Note to CCX Board - Revisit your strategic growth papers and set up CCX to do the same.