American Eagle stages materials with suppliers to keep inventory lean

Dive Brief:

• American Eagle Outfitters will stage materials with manufacturing partners ahead of peak season to be ready to replenish stocks if demand spikes without increasing inventory, Chief Operations Officer Michael Rempell told analysts on a Wednesday earnings call.

• At the end of the second quarter, the apparel retailer's inventory was down 21% year over year (YoY), after an 8% YoY decrease in the first quarter. Total revenue for the company was down 15% YoY in Q2, despite a 48% YoY increase in digital sales.

• For the fall and holiday seasons, the company is bringing in a smaller assortment and reducing overall SKU count, with much of the new product coming from suppliers that require smaller minimum upfront buys, to maximize flexibility.