American Eagle Outfitters Inc. Earnings Cheat Sheet: Fourth Straight Quarter of Profit Growth

American Eagle Outfitters Inc. (NYSE:AEO) reported its results for the third 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 Third Quarter

Results: Net income for American Eagle Outfitters Inc. rose to $52.4 million (27 cents per share) vs. $33 million (17 cents per share) in the same quarter a year earlier. This marks a rise of 58.8% from the year earlier quarter.

Revenue: Rose 10.7% to $831.8 million from the year earlier quarter.

Actual vs. Wall St. Expectations: AEO fell in line with the mean analyst estimate of 27 cents per share.

Quoting Management: Jim O’Donnell, chief executive officer, said, “I am encouraged by our progress in the third quarter and the continued momentum into the holiday season. Strong top line growth is evidence of the success of our key item strategy and merchandise improvements. Looking ahead to 2012, we have tremendous opportunity to capitalize on the strength of our brands and drive future profitable growth.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than twofold and in the first quarter, the figure rose more than twofold.

Gross margin shrank 4.4 percentage points to 37.1%. The contraction appeared to be driven by increased costs, which rose 19% from the year earlier quarter while revenue rose 10.7%.

The company fell in line with estimates last quarter after missing the mark in the previous two quarters. In the second quarter, it fell short by one cent, and in the first quarter, it missed by one cent.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 3.7% to $675.7 million from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 38 cents a share to 39 cents over the last thirty days. The average estimate for the fiscal year has risen to 90 cents per share from 86 cents in the past month.

Competitors to Watch: The Gap Inc. (NYSE:GPS), Abercrombie & Fitch Co. (NYSE:ANF), The Buckle, Inc. (NYSE:BKE), Aeropostale, Inc. (NYSE:ARO), Urban Outfitters, Inc. (NASDAQ:URBN), Zumiez Inc. (NASDAQ:ZUMZ), The Gymboree Corporation (GYMB), dELiA*s, Inc. (NASDAQ:DLIA) and Pacific Sunwear of California, Inc. (NASDAQ:PSUN).

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