American Eagle fast-tracks fulfillment hubs to reduce shipping backlog

American Eagle Outfitters accelerated its plans to open two third-party managed fulfillment hubs outside Boston and Atlanta in the first quarter, COO Michael Rempell told analysts on a Wednesday earnings call. The company fast-tracked the plan as e-commerce orders increased after it closed all stores in mid-March. Though total revenue decreased 38% year over year in the quarter (ending May 2), online orders increased 33%, with much of the boost coming in April. "We had planned to do this over a few years, but the pandemic and the crisis we're going through actually forced us to move much faster," said Rempell. The fulfillment hubs, combined with shipping from 250 stores, helped to reduce a fulfillment backlog brought on by increased volume and distribution center shutdowns to facilitate cleaning. The backlog peaked in mid-April and is now declining, Rempell said. As of Wednesday, the company had reopened 556 stores with buy online, pick up in-store and curbside pick up, but executives said e-commerce volume has not waned.