Despite consumers being cash-strapped in an overall weak economic environment, the latest financial results from major clothing retailers are sending shares in the highly competitive industry ripping higher.
How Good Are the Earnings?
American Eagle Outfitters (NYSE:AEO) and Express (NYSE:EXPR) both reported earnings for the third quarter on Wednesday. American Eagle said net income jumped to $78.6 million (39 cents per share), compared to $52.4 million (27 cents per share) a year earlier. Net sales increased 11 percent to $910.4 million, topping Wall Street’s estimate of about $873 million. Same-store sales rose 10 percent, while gross margin widened to 41.6 percent from 38.1 percent.
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Robert Hanson, chief executive officer explains, “Our third quarter reflected on-going business momentum, profitable sales growth, and a leading brand and product driven customer experience. We’re also pleased to see business strength carry into the fourth quarter and record results over Thanksgiving weekend. As we look forward, we are sharply focused on executing our strategy plan to drive future profitable growth and top tier shareholder returns.”
Looking forward, American Eagle raised its guidance for the year to $1.38 to $1.40 per share, compared to its prior view of $1.33 to $1.36. On average, analysts were expecting earnings to come in at $1.37 per share for the year, according to Thomson Reuters.
American Eagle was not the only company to impress Wall Street…