American Eagle Outfitters Inc.
) reported disappointing preliminary sales and comps results for
third-quarter fiscal 2013. Net sales for the quarter dipped 6%
year over year to $857 million, while it beat the Zacks Consensus
Estimate of $834 million.
AMER EAGLE OUTF (AEO): Free Stock Analysis
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Including sales from its online portal, AEO direct, the company
reported a comparable store sales (comps) decline of 5% compared
with a 10% rise reported in the year-ago comparable quarter.
Though sales dropped due to a taxing economic environment, it
benefited from a 17% rise in AEO direct sales.
Despite the soft preliminary sales results, the company raised
its adjusted earnings guidance for the third quarter to 19 cents
per share, against the previously forecasted EPS range of 14-16
cents. The upside in the earnings forecast is driven by
expectations of better-than-anticipated margin results and clean
inventory at the end of the third quarter of fiscal 2013. The
current Zacks Consensus Estimate for the third quarter is pegged
at 15 cents per share.
The company's adjusted earnings exclude the previously disclosed
non-cash charges related to the shutdown of a distribution
center. The revised forecast also compares to the prior-year
quarter adjusted earnings of 41 cents per share.
American Eagle is scheduled to release its third-quarter earnings
results on Dec 6, 2013, wherein it will provide a fresh business
update and fourth-quarter guidance.
Going forward, the company will continue to remain focused on
enhancing its merchandising, marketing and customer service
performance, while maintaining disciplined inventory and expense
In second-quarter fiscal 2013, the company's earnings declined
52.4% year over year to 10 cents per share, while it was in line
with the Zacks Consensus Estimate. The year-over-year decline in
earnings per share was mainly due to lower sales and higher
Other Stocks to Consider
Currently, American Eagle carries a Zacks Rank #5 (Strong Sell).
Better performing stocks in the apparel retail industry include
Finish Line Inc.
Fifth & Pacific Companies Inc.
). All of these have a Zacks Rank #2 (Buy).