Teen clothing retailer American Eagle Outfitters (
) on Wednesday said its second quarter profit plunged 66% from last
year due to charges stemming from the closure of its
underperforming Martin+Osa chain.
The Pittsburgh-based company reported second quarter net income
of $9.7 million, or 5 cents per share, compared with $28.6 million,
or 14 cents per share, in the year-ago period. Excluding one-time
items, adjusted profit was 13 cents per share.
Net sales fell less than 1% from last year, to $651.5 million,
while same-store sales fell 1%.
On average, Wall Street analysts expected a matching adjusted
profit of 13 cents per share, albeit on higher revenue of $654.6
Looking ahead, the company forecast third quarter profits to
range from 23 cents to 26 cents per share, down from 32 cents per
share last year. That estimate fell shy of analyst estimates of 27
cents for the third quarter.
American Eagle shares fell 24 cents, or -1.9%, in premarket
The Bottom Line
We had removed shares of AEO from our "recommended" list last
Sept.29, when the stock was trading at $15.90. The company has a
3.52% dividend yield, based on last night's closing stock price of
$12.49. The stock has technical support in the $10 price area. If
the shares can firm up, we see overhead resistance around the $14
price level. We would remain on the sidelines for now.
American Eagle Outfitters (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.1 out of 5 stars.
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