American Eagle Outfitters Inc. said its earnings soared on
better-than-expected sales and stronger margins in the latest
quarter.
Shares rose 8.3% to $17.05 in recent premarket trading as the
teen retailer projected a profit for the current quarter that was
mostly above Wall Street estimates.
American Eagle forecast per-share earnings of 11 cents to 14
cents for the current quarter, while analysts polled by Thomson
Reuters called for 11 cents.
Teen retailers such as American Eagle and rivals like
Abercrombie & Fitch Co. have been trying to revive sales after
a long slump. The sector has faced tough competition from
fast-fashion retailers including Forever 21 and H&M that offer
the latest styles at lower prices.
During March, American Eagle promoted the chief merchandising
officers of its namesake and Aerie brands, Chad Kessler and
Jennifer Foyle, in a move that gives them responsibility for their
respective brands' design and merchandising functions and realigns
supporting teams under them.
For the quarter ended May 2, American Eagle reported a profit of
$29.1 million, or 15 cents a share, up from $3.9 million, or two
cents a share, a year earlier. The company expected earnings
between nine cents and 12 cents.
Revenue increased 8.3% to $699.5 million, above analysts'
expectations for $692 million.
Sales excluding newly opened or closed locations rose 7%, while
analysts expected growth of 5.3%.
Gross margin rose to 37.5% from 34.9%.
Write to Tess Stynes at tess.stynes@wsj.com
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