American Eagle Outfitters Earnings: Here’s Why Investors are Not Excited Now

American Eagle Outfitters, Inc. (NYSE:AEO) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 9%.

American Eagle Outfitters, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 57.14% to $0.09 in the quarter versus EPS of $0.21 in the year-earlier quarter.

Revenue: Decreased 1.67% to $727.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Eagle Outfitters, Inc. reported adjusted EPS income of $0.09 per share. By that measure, the company missed the mean analyst estimate of $0.10. It beat the average revenue estimate of $719.46 million.

Quoting Management: Robert Hanson, Chief Executive Officer, stated, “Our second quarter results reflected disappointing product execution in women’s. Additionally, we faced a highly promotional and competitive retail landscape and a decline in traffic, which have continued into the third quarter. We are working hard to strengthen our assortments, marketing efforts and overall execution, while maintaining tight inventories and disciplined expense management. Although extremely disappointed with our results, I’m confident in the strength of our brands, our strategic initiatives including, factory stores, aerie, omni-channel and international, as well as the team’s resolve to regain momentum and improve our bottom line performance.”

Key Stats (on next page)…

Revenue increased 7.04% from $679.48 million in the previous quarter. EPS decreased 50% from $0.18 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.44 to a profit $0.35. For the current year, the average estimate has moved down from a profit of $1.45 to a profit of $1.19 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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