On Thursday, American Eagle Inc. (NYSE: AEO), revealed it expects fourth-quarter revenue to fall to low-single digits. Amid the lack of traffic within brick-and-mortar locations, sales have suffered throughout the ongoing Covid pandemic. The company’s shares plummeted 2.5% in premarket trading.
The forecast is below analysts’ estimated 0.14% loss, according to Refinitiv.
Nevertheless, the retailer believes online sales momentum will continue, as sales within both of its brands rise to double digits. According to the company, its lingerie brand, Aerie, is expected to reach revenue in the 20% range during the fourth-quarter. Furthermore, its American Eagle brand is forecasted to experience a dip in sales to the low double digits.
Shares were up 1.2% during morning trading on Thursday.
“Compelling holiday product and marketing, combined with a disciplined approach to promotional activity drove very strong margin results,” Chief Executive Jay Schottenstein said in a statement. “I believe we are well-positioned as we head into 2021.”
Official Fourth-quarter results as well as its fiscal 2020 outcome are expected to be available on March 3.
In another press release Thursday, the company detailed long-term financial goals, steered towards growing its Aerie brand to USD2 Billion, while it also works to restructure and improve the American Eagle brand.
“Aerie has been posting among the best growth in retail, and therefore $2 billion seems a reasonable target to present,” BMO Capital Markets senior analyst Simeon Siegel said. “But it also seems fair investors may have been looking for more.”