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American Eagle Outfitters Inc. on Wednesday said its earnings rose 39% in the latest quarter as revenue topped expectations and margins improved.

The Pittsburgh-based retailer, which has been closing stores and expanding its digital operations as it built its business back from a near two-year sales slump, expects to make 20 cents to 21 cents a share in profit with sales at stores open for at least a year expected to improve in the low single digits.

Those figures compared with a projected 20 cents a share in profit, according to analysts surveyed by Thomson Reuters, and a comparable-sales increase of 1.7%, according to analysts surveyed by FactSet.

American Eagle, which had reported two consecutive years of falling comparable sales, ended its latest fiscal year with comparable sales up 7%.

In the latest period, comparable sales rose 6%. Comparable sales at Aerie, which focuses on lingerie, rose 32%, building on the company's #AerieREAL marketing campaign, which uses models whose photographs haven't been retouched.

American Eagle started with one store at Twelve Oaks Mall in Novi, Mich., and initially focused on outdoor-sports apparel and equipment. It later recast itself as a clothing retailer with a collegiate flair. The retailer, part of the retail empire of the Schottenstein family of Columbus, Ohio, went public in 1994.

Jay L. Schottenstein, the company's longtime chairman and chief executive for about a decade through 2002, retook the helm of the retailer in 2014.

Mr. Schottenstein, who has been credited with leading the company's swift recovery, has shuffled top ranks and overhauled operations, focusing on digital expansion and brand building.

For the period ended April 30 American Eagle reported profit of $40.5 million, or 22 cents a share, above its projection of 17 cents to 19 cents a share.

Last year, it reported $29.1 million, or 15 cents a share, in profit.

Meanwhile, revenue rose 7.1% to $749.4 million, compared with analysts' expectations for $731.4 million.

Gross profit margin improved by 1.7 percentage points to 39.2%.

American Eagle also named marketing veteran Kyle Andrew as its new chief marketing officer, starting next month. Ms. Andrew's experience includes serving as brand director at Kate Spade & Co. from 2013 through 2015. She joined Kate Spade in 2008 as head of global brand marketing. Her previous experience includes executive marketing roles at Kenneth Cole Productions and Gap Inc.

Tess Stynes contributed to this article

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

May 18, 2016 16:55 ET (20:55 GMT)

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