American Eagle Outfitters (AEO) had digital sales growth of over 20 per cent in the fourth quarter, reaching record levels, making it the 12th consecutive quarter of double-digit growth.

Digital penetration increased 340 basis points in the fourth quarter, expanding to just under 31 per cent of revenue in the fourth quarter, compared to 27 per cent in the prior year period.

Earnings are projected to grow from 16 cents in the corresponding quarter of last year to 22 cents in the first quarter of 2018 (three months ended April 2018). Higher sales, a reduced promotional environment, benefiting from improved consumer confidence, and a lower tax rate are the main factors that should drive earnings growth.

American Eagle’s lingerie and active wear brand, Aerie, has gone from strength to strength, driving sales growth for the company. It posted a 15th consecutive quarter of positive comps in the fourth quarter 2017, at 34 per cent, building on the 17 per cent seen in the prior year period.

In addition to impressive growth in core intimates, the company has seen strength in apparel, active wear, and swim wear. The company expects the brand to cross a billion dollars in sales in the next couple of years, with a lot of this growth coming from its digital channel, which has been growing at a tremendous rate.

Aerie is also expanding its store count, with 35 to 40 new stores expected in 2018.