- American Eagle said on Wednesday it used pricier air freight in the latter half of last year to circumvent factory closures in Asia.
- The U.S. retail industry has been wrestling with soaring prices for logistics over several months.
- American Eagle's namesake division posted a 11% rise, while its Aerie division recorded a 27% jump.
Apparel chain American Eagle Outfitters said it expects its earnings to decline in the first half of 2022, after hitting a more than 10-year high last year, as benefits from the federal stimulus fade and freight expenses spiral upward.
The Aerie parent said on Wednesday it used pricier air freight in the latter half of last year to circumvent factory closures in Asia.
The U.S. retail industry has been wrestling with soaring prices for logistics over several months, as the Covid-19 pandemic triggered supply chain snarls that led to shortages of container ships and logjams at ports.
Major logistics operators are expecting congestion, tight capacity and high freight rate levels to persist well into 2022, with the impact expected to be more pronounced in the first half of the year.
These concerns also led Abercrombie & Fitch to warn of weaker margins in 2022 earlier in the day.
American Eagle forecast its earnings to decline in the first half, followed by a recovery in the second.
The company, however, said it was pleased with the early performance of its spring collections helped by earlier deliveries of shipments to ensure its shelves are sufficiently stocked.
American Eagle reported an adjusted operating income of $92 million for the fourth quarter, which ended Jan. 29, including $60 million in elevated air freight costs. It had earlier projected an operating income of between $90 million and $100 million.
Total net revenue increased 17% to $1.51 billion, in line with Wall Street expectations, according to IBES data from Refinitiv.
American Eagle's namesake division posted a 11% rise, while its Aerie division, a pandemic beneficiary that makes activewear, swimsuits and bralettes, recorded a 27% jump.
Adjusted earnings per share came in at 35 cents.