American Eagle Stock Pummeled on Holiday Sales Miss
Teen retailer American Eagle Outfitters reported Friday morning that fourth-quarter same-store sales were up 4%, but that was less than consensus estimates.
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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.
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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.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
