American Eagle Trips Over Missed Guidance

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American Eagle Outfitters Inc. (NYSE: AEO) reported its fiscal third-quarter financial results before the markets opened on Wednesday. The company posted $0.41 in earnings per share (EPS) and $940.6 million in revenue. Consensus estimates from Thomson Reuters had called for $0.41 in EPS and revenue of $940.94 million. In the same period of last year, the retailer reported EPS of $0.35 and $919.07 million in revenue.

Consolidated comparable sales increased 2%, following a 9% increase last year.

During the quarter, the company opened four AE stores, six aerie stores and one Tailgate store. In the same period, three AE stores were closed.

In terms of the outlook for the fiscal fourth-quarter, the company expects EPS to be in the range of $0.37 to $0.39. The consensus estimates were $0.45 in EPS and $1.14 billion in revenue.

On the books, American Eagle cash and cash equivalents totaled $292 million, compared to $363 million last year. Lower cash was the result of $212 million in share buybacks in the fourth quarter last year. In addition, the company returned $92 million in cash dividends and spent $152 million in capital expenditures over the past year.

Jay Schottenstein, CEO of American Eagle, commented:

I’m pleased that we continued to deliver strong results in a tough retail climate, with the third quarter reaching record sales and marking the 9th consecutive quarter of profit improvement. We are sharply focused on delivering the best innovation, consistent quality and outstanding value to our customers day-in and day-out. The holiday season is off to a solid start and our brands are well-positioned. We will continue to leverage our leading capabilities to maintain momentum and build on the progress we’ve made over the past few years.

Shares of American Eagle closed Tuesday at $18.91, with a consensus analyst price target of $19.91 and a 52-week trading range of $12.78 to $19.55. Following the release of the earnings report, the stock was down over 11% at $16.70 in early trading indications Wednesday.