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American Eagle posts better-than-expected fourth quarter results

US retailer American Eagle Outfitters grew its profits by 487% to $61.6m (£40.3m) in the 13 weeks to January 31, after they dipped to $10.5m (£6.8) last year following a slump in demand attributed to the severe winter.

Revenues at the retailer, which operates the eponymous chain American Eagle Outfitters and underwear brand Aerie, were up 3% to $1.07bn (£700m) in the fourth quarter, but like-for-like sales were flat.

During the period the company closed 42 stores - 39 American Eagle and three Aerie - worldwide. It opened six new locations, including three in the UK at Westfield London, Westfield Stratford and Bluewater in Kent.

It now operates more than 1,000 own stores in the US, Canada, Mexico, China, Hong Kong and UK, as well as 99 licensee stores in 16 countries.

Profits for the full year to January 31 dipped by 3.6% to $80.3m (£52.5m), as revenue decreased 1% to $3.28bn (£2.14bn) and like-for-like sales by 5%, following on from a 6% drop in 2013.

AEO suffered a stumbling block in January 2014 when chief executive Robert Hanson stepped down after less than two years. The business is under the control of executive chairman Jay Schottenstein in the interim.

Schottenstein said the fourth quarter results exceeded expectations: “After a tough start to fiscal 2014, I’m pleased to see our initiatives and business priorities begin to deliver results. Improved merchandise assortments, combined with a better customer experience, drove strengthened sales trends and we successfully reduced promotions.”

AEO has also announced the promotion of chief merchandising officers Chad Kessler and Jennifer Foyle to the positions of global brand presidents.

Kessler joined the business in February 2014 as chief merchandising and design officer for the eponymous chain. Prior to that he worked at Abercrombie and Fitch for 15 years, where he helped launch Hollister.

Foyle joined AEO in August 2010 as chief merchandising officer for the Aerie brand. She previously worked at J Crew in the same role.

@LukeToddUK

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