American Eagle Outfitters, Inc. (NYSE:AEO) Q4 2022 Earnings Call Transcript

And as I mentioned — as you can see that our customer base is growing at an incredible rate. In fact, I just looked at a chart, I believe it’s over 10 million customers at this stage, like, quadrupling the base. It’s incredible what we’ve done in Aerie and it is about building that brand awareness, as I mentioned, and getting into new markets and learning about those customers and building that community, Adrienne. Like, we do this grassroots in both brands, and I’ll get to AE in a minute. But we have ambassadors and those tentacles and Sunny and the store team have done an amazing team, using our associates to reach our customers. And Michael said it even best, right? Like, our store experience and our customer experience, you heard those results, they’re like no other, and that’s a winning edge for us, and it’s a place that we’re not going to quit.

So, that’s the Aerie story. In AE, as I mentioned, we’re sort of rebirthing the brand, sort of pulling back to go forward. We’re seeing new opportunities now. And in doing so, I’d like to say we kicked off January with our new launch of AE 24/7, but let’s not forget what we’re up to, okay? Some of the new stats are saying over the past two years, more recently, so January into February, we are seeing Gen-Z take a greater hold on the AE brand. I’m saying this, and I mean this. Like, the Outer Banks. We just did a collab with Outer Banks. It’s the number one teen show out there. The product sold out. We’re going to do collabs. We are going to get this customer into our brand and what we’ve been doing so great, Adrienne, is they’re living with us.

They’re staying with us. We’ve mastered that. Now what we’re up to is, getting this customer into American Eagle, seeing the new American Eagle, seeing all the work that we’ve done. And the trends, we’re liking what we’re seeing. We just had a jean that just went viral on TikTok, with — I mean, the number one TikToker out there, Alix Earle, every girl watches her and this jean is on fire. It reminds me of the old days of the crossover legging in Aerie. We are chasing that jean. And what I love about it most, the most important thing is, if you can get organic winners into your brand, organic customers and organic play, organic social media, all of that means more to our customers and what our brands stand for, which is 100% — we’re authentic.

That’s what we stand for. Aerie is real, AE is authentic. And if we can get more of those customers and we can get that buzz, that’s what we’re doing. So tons of positive signs. We have collabs, you’re going to see left and right, back-to-school. We have another great collab. We just have some really exciting things coming, and we’re going to now use this new base in AE to kind of launch ahead and move forward.

Adrienne Yih : That is super helpful. Go ahead.

Mike Mathias : And Adrienne, just to answer the second part of your question on AUR, AUR is still up over 20% to 2019. And you talked about that being a combination of controlled promotions, more targeted promotions versus full box offers some structural changes in our loyalty program in terms of giving away free jeans historically that we eliminated during the pandemic, which we don’t plan on going back to, I think, targeted increases in ticket where we have not seen price resistance and where we can see the customers willing to pay for it. And that’s the continued strategy. We build up that brand equity through the pandemic, and our plans are set to not give that back.

Adrienne Yih : Thank you very much. Super comprehensive and super helpful. Best of luck.

Mike Mathias : Thanks, Adrienne.

Operator: Thank you. And our next question is from Alex Straton with Morgan Stanley. Please proceed with your question.