Retail

American Eagle Stock Pummeled on Holiday Sales Miss

Paul Ausick

Published: January 8, 2016 11:15 am

Last Updated: January 13, 2020 3:15 pm

Teen retailer American Eagle Outfitters Inc. (NYSE: AEO) reported Friday morning that fourth-quarter same-store sales to date are up 4% year over year and that the company continues to forecast the quarter’s earnings at $0.40 to $0.42. That was not good enough for investors.

Shares dropped about 15% in early trading Friday because reported sales came in lower than expectations. Retail Metrics had a consensus analyst estimate for same-store sales to rise 4.7%.

American Eagle CEO Jay Schottenstein said:

Despite a very challenging macro-environment, we had a solid holiday season, driven by positive results in both our brands. The online business was particularly strong, and we leveraged our omni-channel tools to deliver an improved customer experience. I am extremely pleased with the steady progress made in 2015, with expected annual EPS growth of roughly 70%.

In addition to its namesake stores, American Eagle also operates Aerie brand stores.

Retail stores catering to teens have had a tough year or so as more traditional retailers like American Eagle are losing ground to fast-fashion brands like H&M, Forever 21 and Zara. Warm weather during the past few months of 2015 also stunted sales of winter garb.

Shares of American Eagle traded down more than 15% Friday morning and posted a new 52-week low of $13.40. The stock started the year at $15.30, and the 52-week high is $18.49.