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

And early reads, we’re feeling really good about it. So again — and then how do we reinvent the black leggings? We have new launches coming forward, starting in Q3, a really exciting launch in Q4 that I think will definitely separate us from our competition, and we’re going to continue to build on all the equity that we built on in both brands as far as building our AURs, building that quality, and — the customer is willing to pay, we’re seeing that because they trust us. So I think that’s — when it comes to the legging business, that’s what we have to just continue to work on. So — and get that dress. And hopefully, they’ll grow with us the way we — they already have, those customers. So thanks, Janet.

Mike Mathias: Hi, Janet. And on inventory, by the time we get to end of the first quarter, as we talked, about total inventory is projected to be down as we sit today and actually at the end of the fourth quarter, AE and Aerie US and Canada inventory was down high single-digits. We’re expecting that to actually, by the time we get to end of Q2, to be down even further, which really it should be, right? We were against the elevated inventories last spring that we had to clean up. You’d expect us to be down pretty significantly on this guide of flat to low single-digit revenue increase. Then when you get to the back half of the year, knowing all the actions we took last year to write that inventory for the back half, which drove the positive results we saw in Q3 and Q4 in general, it’d be really just philosophically back to inventory growth being below sales growth expectations similar to below. And that’s what we’re planning as of now.

Judy Meehan: Okay. We are running up on time now. So I’ll turn it back over to Jay for some closing remarks.

Jay Schottenstein: Okay. Entering 2023, we are in better position. Our brands and operations are healthy. Given macro uncertainties, our outlook is cautious, we will stay disciplined on expenses and inventory. If demand is stronger, we will strive to deliver better results. Thank you for joining the call, and I look forward to updating you on our progress next quarter. Thank you.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.