The struggles of traditional retailers have been well-documented, and basically no mall-based chains have been immune to the industry-shifting changes in consumer shopping habits. Nevertheless, some companies have adapted better than others. American Eagle Outfitters (AEO – Free Report) is one of those companies.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories, and footwear for men and women between the ages of 16 and 34. The company sources, designs, and markets a line of clothing classics like jeans, khakis, and T-shirts under its American Eagle Outfitters and AE brand names for exclusive sale in its stores and e-commerce marketplaces.
Two weeks ago, American Eagle reported quarterly earnings that missed our consensus estimate. However, the report included several encouraging results and solid guidance. Shares have surged about 13% since the earnings announcement. This report also ushered in a number of positive estimate revisions, helping the stock earn a Zacks Rank #1 (Strong Buy).
Latest Earnings Results
American Eagle reported its third-quarter earnings results on December 6. The company posted earnings of 37 cents per share, which missed our consensus estimate of 39 cents and slumped about 9.8% year-over-year.
However, total net revenues increased about 2.1% and marked record quarterly sales for the company. Consolidated comps increased 3%—an improvement to the 2% comps growth witnessed in the year-ago period. These Q3 results represented the company’s 11th consecutive quarter of positive comps.
Even more importantly, American Eagle’s e-commerce business exhibited impressive expansion. Online sales exhibited growth in the high teens and represented about 25% of the company’s total revenues.
But American Eagle did mention some positive trends at its brick-and-mortar locations. In fact, management said that traffic and transactions improved in the quarter. Brand wise, comps rose 19% at the company’s aerie stores and inched up 1% at AE brand outlets.
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