The H1 FY2022 revenues of American Eagle Outfitters Inc are expected to decline due to a surge in freight expenses and fading of benefits from federal stimulus.

The apparel chain faced uneven inventory flow in its high –margin Aerie leggings during the latter half of 2021 despite using pricier air freight to circumvent factory closures in Vietnam.

However, American Eagle expects earnings to improve in the second half of this year as it does not plan to use elevated air freight.

The company also plans to discount more in the spring season after historically low levels last year, when the roll-out of federal stimulus checks enabled customers to spend more on its clothes and accessories.

In the fourth quarter ended January 29, total net revenue increased by 17 per cent to $1.51 billion, in line with expectations, according to IBES data from Refinitiv.

American Eagle's namesake division posted a 11 per cent rise. Its Aerie line, which makes activewear, swimsuits and bralettes, recorded a 27 per cent jump.

The US retail industry has been wrestling with soaring freight prices for several months, and major logistics operators are expecting congestion, tight capacity and high freight rates to persist well into 2022. Rival Abercrombie & Fitch Co has also warned of weaker margins in 2022.