How American Eagle Outfitters’ EBITDA Growth Outpaced Revenue Growth In 2015

-33.67%
Downside
25.79
Market
17.11
Trefis
AEO: American Eagle Outfitters logo
AEO
American Eagle Outfitters

American Eagle Outfitters‘ (NYSE:AEO) revenues increased a sizeable 7% during 2015, driven by a similar growth in comparable sales and partially offset by the closure of underperforming stores throughout the year. The growth is impressive considering that several of the company’s casual apparel peers have failed to achieve even positive growth in revenues, amid an edgy retail environment, store consolidation, and fierce competition from fast fashion retailers. What’s even more impressive is American Eagle’s 34% EBITDA (earnings before interest tax depreciation and amortization) growth, which was boosted by slower growth in cost of goods sold (COGS), and SG&A expenses. Slower than revenue growth in COGS can be attributed to fewer discounts, thanks to a better merchandise portfolio. And a nominal gain in SG&A expenses can be attributed to lower rent expenses and a one-time gain on previously closed sale of Warrendale distribution center.

AEO earnings

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for American Eagle Outfitters
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