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American Eagle online sales fall as in-store shopping spree rebounds

A view of an American Eagle Outfitters store in Arlington, Virginia

By Praveen Paramasivam and Reshma George

(Reuters) - American Eagle Outfitters Inc's quarterly revenue missed estimates on Thursday as its online sales took a hit from shoppers returning to physical stores on easing pandemic curbs, sending the shares of the apparel chain down 10%.

The company's second-quarter digital sales fell 5% from a year earlier, also hit by stiff e-commerce competition from firms including Amazon.com Inc and Poshmark, although it remained higher compared with pre-pandemic levels.

Revenue came under pressure from back-to-school selling season and some tax-free shopping events moving to the third quarter, American Eagle executives said on the earnings call.

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American Eagle, which last month acquired logistics startup AirTerra, said it hopes to make digital sales account for half of its revenue in the longer term, up from 35% in the second quarter.

However, the owner of Aerie brand said it expects a robust holiday season by booking products early and spending more on transporting goods to its stores, even as it grapples with industry-wide supply chain issues.

Total net revenue rose 35% to $1.19 billion in the second quarter ended July 31, missing Refinitiv-IBES estimates of $1.23 billion. However, it rose about 15% from pre-pandemic levels in 2019, below the median increase reported by U.S. consumer companies tracked by BMO Capital Markets analysts.

(Reporting by Praveen Paramasivam and Reshma Rockie George in Bengaluru; Editing by Ramakrishnan M.)