Truth by Numbers: American Eagle
American Eagle is pulling on the heart strings of consumers, and through inclusive brand marketing, boosting operating margins and earnings growth. Following the body positive campaign #WeAllCan in 2016 and the introduction of a denim hijab last year, AE’s newfound success is fueled by Aerie lovers. AE’s lingerie brand continues to push body positivity, as record growth rates center around real emotional connection with American Eagle’s expanding customer base.
This year’s first quarter marked American Eagle's 13th straight quarter of positive comparable sales, exceeding company expectations. By brand, American Eagle's comparable sales rose 4% and Aerie's comparable sales rose 38%, according to a recent press release.
In a highly promotional retail market, AE has recently launched a crowdsourcing run for customers to share fitting room selfies with #AEXME and @americaneagle and be featured in its Spring '19 campaign.
While the promotional efforts emphasize a social experience, we were still wondering whether American Eagle has avoided the discounting cycle plaguing retailers in Q1 and Q2 after heavy discounting during Q4. Let's take a look.
You can see that compared with the same period in 2017, American Eagle has reduced the average discount amount - a positive indicator that correlates with their latest strong financial growth.
However, we wanted to unpack how Aerie has performed relative to the rest of the American Eagle assortment, so we looked at discounting trends for the two groups of product.
Perhaps one reason why Aerie has been moving off the shelves? It’s not only more likely to be on discount than the rest of the assortment - its average discount is also higher.
Our takeaway? Although American Eagle reduced overall discounting during Q1 (comparable to last year), the flagship continues to push a discounted Aerie assortment. And if there’s one thing we know is that this path should be embarked upon with great caution - once always discounting - it’s difficult to pull back from that. (No matter how inclusive your marketing is!)