ACC 684 Section 1: American Eagle
ACC 684 Section 1
American Eagle
Outfitters
Part A: iChallenge | kchakrab | 20297742
Kalpita Chakrabarty
3/15/2013
AE outsources its merchandise and manufacturing which allows it to focus on other key activities. First, AE strongly focuses on supply chain management, which helps in reducing production lead-time. This allows the company to adapt quickly to emerging trends relative to its competitors. This also allows the company to provide a wider selection of products.
As discussed above, AE relies on the use of promotions and discounts to deliver on the price aspect of the value proposition. AE also heavily uses marketing campaigns to continue to develop the brand and raise awareness. Finally, AE aims to gain market …show more content…
Refer to
Appendix B for more detail. 1
Note: A new set of financials were issued on March 13, 2013 for year ended Feb 2013 (Fiscal Year 2012).
However, this analysis is based on the annual report for year ended January 2012 (Fiscal Year 2011).
2
Note on years: Throughout this analysis 2012, 2011 and 2010 refers to years ended January 28,2012, January 29,
2011 and January 30, 2010 respectively. 2012 does not correspond with Fiscal Year 2012 as that is year ended
February 2, 2013.
12 | P a g e
Analysis of Current Performance
Figure 3: Merchandise Mix for 2011 and 20123
3
Note: Men 's and women 's apparel relates to the original AE brand; Kid 's apparel is primarily composed of the
77kids brand
13 | P a g e
Analysis of Current Performance
Figure 4: Breakdown of Revenues by Geographical Segment
Breakdown by Geographical Segment (same for 2011 and 2012)
10%
United States
Foreign
90%
A majority of AE 's revenues comes from the US. Foreign revenue consists primarily of revenue …show more content…
Based on
Figure 6: Revenue Decomposition based to be focusing on opening for aerie Segments the decomposition, American Eagle appearson Merchandise Mix and Geographicand 77kids and closing down their original American Eagle stores. Refer to Appendix A for greater detail.
15 | P a g e
Analysis of Current Performance
Based on these decompositions, it appears revenue growth in 2012 is primarily driven by the sale of men 's and women 's apparel under the American Eagle brand. This is consistent with 2011 as revenues from the AE brand appear to have grown the most in relation to its other brands (aerie and 77kids). Note: 77kids is a relatively new brand which is why it accounts for approximately 1.06% of revenue growth in 2012.
On a geographic segment level, it appears that U.S. revenue growth is primarily driving the high revenue growth rate in 2012 and foreign growth is driving it in 2011. Refer to Appendix C for greater detail.
16 | P a g e
Analysis of Current Performance
Figure 7: Revenue Decomposition based on Various Productivity Measures
The general trend is that in
2012 more revenue is being generated despite a decrease in average PPE and a
American Eagle
Outfitters
Part A: iChallenge | kchakrab | 20297742
Kalpita Chakrabarty
3/15/2013
AE outsources its merchandise and manufacturing which allows it to focus on other key activities. First, AE strongly focuses on supply chain management, which helps in reducing production lead-time. This allows the company to adapt quickly to emerging trends relative to its competitors. This also allows the company to provide a wider selection of products.
As discussed above, AE relies on the use of promotions and discounts to deliver on the price aspect of the value proposition. AE also heavily uses marketing campaigns to continue to develop the brand and raise awareness. Finally, AE aims to gain market …show more content…
Refer to
Appendix B for more detail. 1
Note: A new set of financials were issued on March 13, 2013 for year ended Feb 2013 (Fiscal Year 2012).
However, this analysis is based on the annual report for year ended January 2012 (Fiscal Year 2011).
2
Note on years: Throughout this analysis 2012, 2011 and 2010 refers to years ended January 28,2012, January 29,
2011 and January 30, 2010 respectively. 2012 does not correspond with Fiscal Year 2012 as that is year ended
February 2, 2013.
12 | P a g e
Analysis of Current Performance
Figure 3: Merchandise Mix for 2011 and 20123
3
Note: Men 's and women 's apparel relates to the original AE brand; Kid 's apparel is primarily composed of the
77kids brand
13 | P a g e
Analysis of Current Performance
Figure 4: Breakdown of Revenues by Geographical Segment
Breakdown by Geographical Segment (same for 2011 and 2012)
10%
United States
Foreign
90%
A majority of AE 's revenues comes from the US. Foreign revenue consists primarily of revenue …show more content…
Based on
Figure 6: Revenue Decomposition based to be focusing on opening for aerie Segments the decomposition, American Eagle appearson Merchandise Mix and Geographicand 77kids and closing down their original American Eagle stores. Refer to Appendix A for greater detail.
15 | P a g e
Analysis of Current Performance
Based on these decompositions, it appears revenue growth in 2012 is primarily driven by the sale of men 's and women 's apparel under the American Eagle brand. This is consistent with 2011 as revenues from the AE brand appear to have grown the most in relation to its other brands (aerie and 77kids). Note: 77kids is a relatively new brand which is why it accounts for approximately 1.06% of revenue growth in 2012.
On a geographic segment level, it appears that U.S. revenue growth is primarily driving the high revenue growth rate in 2012 and foreign growth is driving it in 2011. Refer to Appendix C for greater detail.
16 | P a g e
Analysis of Current Performance
Figure 7: Revenue Decomposition based on Various Productivity Measures
The general trend is that in
2012 more revenue is being generated despite a decrease in average PPE and a