American Eagle Outfitters Earnings: Misses Revenue Target, Shares Fall

American Eagle Outfitters Inc. (NYSE:AEO) reported net income above Wall Street’s expectations for the first quarter. American Eagle Outfitters is a retailer that designs, markets, and sells its own brand of clothing, accessories, and personal care products.

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American Eagle Earnings Cheat Sheet for the First Quarter

Results: Net income for American Eagle Outfitters Inc. rose to $39.7 million (20 cents per share) vs. $28.3 million (14 cents per share) in the same quarter a year earlier. This marks a rise of 40.1% from the year-earlier quarter.

Revenue: Rose 18% to $719.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Eagle Outfitters Inc. reported adjusted net income of 22 cents per share. By that measure, the company beat the mean estimate of 20 cents per share. Analysts were expecting revenue of $720 million.

Quoting Management: QuotRobert Hanson, chief executive officer stated, “I’m extremely pleased by our performance this quarter and appreciate the team’s accomplishments. We remain focused on delivering continued improvements in the near term, while fortifying our core brands and capabilities to pursue incremental profitable growth and consistent returns to shareholders.”

Key Stats:

Gross margin shrank 0.1 percentage point to 37.9%. The contraction appeared to be driven by increased costs, which rose 18.2% from the year earlier quarter while revenue rose 18%.

Revenue has increased for four quarters in a row. Revenue increased 13.8% to $1.04 billion in the fourth quarter of the last fiscal year. The figure rose 10.7% in the third quarter of the last fiscal year from the year earlier and climbed 3.7% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the fourth quarter of the last fiscal year, it topped expectations with net income of 35 cents versus a mean estimate of net income of 34 cents per share.

Net income has increased 64.1% year-over-year on average across the last five quarters. The biggest gain came in the first quarter of the last fiscal year, when income climbed more than twofold from the year-earlier quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is 12 cents per share, up from 9 cents ninety days ago. For the fiscal year, the average estimate has moved up from $1.06 a share to $1.18 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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